Darjeeling tea gardens’ sell-off deal brews fear of Chinese takeover

Sources said that the Darjeeling administration has halted the ownership transfers of six tea gardens

Darjeeling tea garden
Incidentally, 100 per cent foreign direct investment is allowed In the tea sector | Representative Photo: PTI

The West Bengal government has red-flagged attempts by two tea companies to sell some of their gardens in Darjeeling to investors based in Singapore and Hong Kong, fearing indirect Chinese investment in these deals.

Sources in the state’s land and land Reforms department, at least two tea associations and a trade union said a few months ago, the Darjeeling district administration had halted ownership transfers of six gardens, located not very far from the Army’s Sukna-based 33 Corps.

The district administration’s action was reportedly prompted by intelligence inputs about China trying to acquire gardens located along India’s Siliguri corridor, a narrow stretch of about 22 kms width, also known as Chicken’s Neck, that connects mainland India with the northeastern states.

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The district administration has sought more details from the companies about the overseas investors to whom they were planning to sell their gardens, sources said.

In the tea sector, incidentally, 100 per cent foreign direct investment is allowed. But the government stepped up scrutiny of foreign investments following reports of possible “opportunistic” takeovers or acquisitions of Indian companies by Chinese investors, taking advantage of the coronavirus pandemic-induced economic downturn.

The Darjeeling district administration, however, had acted even before the central government’s Department for Promotion of Industry and Internal Trade in April made prior government clearance mandatory for investments, even indirect ones, from countries sharing land border with India, in a bid to clamp down on investments from China.

Though no one is willing to come on record to name the companies that were trying to sell off their gardens, two sources on conditions of anonymity claimed three gardens belong to the Alchemist Group and three others to the Ambootia Group.

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Dhotre, Peshok, and College Valley are the three Alchemist Group’s gardens up for sale, sources said. The group is said to have been in talks with a Hong Kong-based company to sell its three gardens lying abandoned since 2017. In May 2018, the gardens were brought under the state government’s Financial Assistance for the Workers of Locked Out Industries (FAWLOI) scheme.

The group, including its owner KD Singh, is facing probe by multiple central and state government agencies such as Enforcement Directorate and the Securities and Exchange Board of India (SEBI), for several irregularities, including running a ponzi or chit-fund scheme.

No one from the group could be contacted for their reaction on the sell-off deal as its offices are either sealed by the investigating agencies or abandoned.

Chairman of the Ambootia Group, Sanjay Bansal, when contacted over his mobile phone to get his view over the group’s reported attempt to sell three gardens to a Singapore-based company with alleged link to Chinese investors, evaded the issue saying, “I don’t talk to strangers.” He also did not reply to text messages.

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Its administrative office in Kolkata, when contacted, said a “responsible person” from the group would get back soon to answer the queries. The response, however, did not come even after the lapse of more than 48 hours.

Darjeeling District Magistrate S Ponnambalam said that he was now too busy to divulge the details of the action taken by the administration. “Right now, we (administration) are too busy combatting the COVID-19 pandemic. I have to see those files, but for that I don’t have time now,” Ponnambalam said over the phone.

Some trade unions active in the gardens have also reportedly conveyed their concern about the development to the district administration. “We had alerted the government about the development. Even the Tea Board of India is keeping a tab on it,” said CITU’s Darjeeling district general secretary Saman Pathak.

Ponnambalam, however, asserted that it would not be easy to scrape through any such deal quietly as all tea garden land belongs to the state’s land and land Reforms department, and without its consent no land lease agreement could be transferred.

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