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Deveshwar Mounts Strong Defence To Blunt Criticism

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Last Updated : Aug 23 1996 | 12:00 AM IST

Speaking on the occasion, Deveshwar acknowledged that there were differences on various issues between him and BAT Industries Plc, the United Kingdom-based parent of ITC Ltd.

"The BAT representatives are professional managers and when human beings work together there can be differences," he said, "but these can be sorted out by sitting together in a closed room".

"And I need your help to do so", he said, addressing the shareholders.

The Rs 4,000 crore-plus tobacco major chairman, however, did not disclose the areas of differences between the two and said, "a difference of opinion between people is a healthy sign".

"We cannot undo what happened, but now we are engaged in building relationship and confidence on both sides. This will take time," said Deveshwar.

Deveshwar was addressing the four-hour long AGM at the grounds of St Paul's Cathedral, Calcutta yesterday (Thursday) amidst torrential downpour.

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Around 2,000 shareholders nonetheless crowded into the spacious arena built for the purpose, and came up with searching questions for the chairman, who stood patiently throughout his first AGM.

Questions centred on media revelations over the last few months on the now-ruptured controversial trade partnership with the Chitalias, the lower dividend payout, and problems with BAT Industries Plc.

A number of shareholders queried the passivity with which institutional shareholders and BAT were discharging their responsibilities on the ITC board.

Deveshwar requested the minority shareholders to refrain from magnifying the differences of BAT and the financial institutions.

"We derive mutual benefit from each other", he said, "and I will continue to ask them for help so long as it subserves the interest of the company."

According to the chairman, wrong decisions, the speed with they were implemented involving several overseas issues, changed economic climate and the man with which the company was dealing had been the cause for trouble brewing at Virginia House.

Denying management's involvement in the controversial Chitalia case, Deveshwar said, "We have no knowledge of any Fera violations till now. But interpretation of law is interpretation of law till somebody establishes it."

The enforcement directorate, according to the chairman, started an inquiry on the basis of media reports and exposure.

Explaining the reason for his silence on the rice deal, Deveshwar refused to get embroiled in a dirty battle. "It is only those who have vested interest, is a coward or have something to hide make an issue of it".

Necessary steps has already been taken and a case filed against the US partner Chitalias which will be decided by the court. The matter is currently sub judice.

"No one has as yet proven the charges to me. If anybody in my company has made personal gain in the rice deal, I assure you that the board of directors will not spare the concerned person; neither will the law," said Deveshwar.

Defending himself and the management in the strong annual general meeting speech, Deveshwar promised to "speak out" when put under pressure and provide answers at the appropriate time.

He also assured the shareholders that the management is trying to secure its trading activities so that "no one can take us for a ride in the near future". For the first four months of the current fiscal, trading activities has done well, he said.

The performance of the tobacco division, despite the excise, income tax and the enforcement directorate imbroglio, also improved by 22 per cent in volume terms and 25 per cent in value in this financial year 1996-97.

Since ITC Global Pte will accrue losses in 1996-97, the company has hired consultants to stage a turnaround. The Government of India has also been approached to give permission to infuse fresh funds to the Singapore subsidiary, added chairman.

Answering to the queries on assessment by Income Tax, he said, "in our opinion, no income has escaped assessment".

Since the company's core activities comprise tobacco, hotels, paper, packaging, and financial services, efforts are being made to consolidate its businesses.

The financial services arm of the group has decided to "cap speculation and involve itself in business that is safe and prudent.

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First Published: Aug 23 1996 | 12:00 AM IST

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