A murky boardroom battle is being fought at the Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets dairy products under one of India's top brands Amul. Fourteen of its 17 elected board members, most affiliated to the ruling BJP in the state, have got together to oust Chairman Vipul Chaudhary.
When Chaudhary was elected unopposed in August 2012 for a three-year term, he enjoyed the confidence of BJP affiliated unions who form a majority on the board. GCMMF is a body of 17 milk producing cooperative unions of Gujarat. It markets the products of these unions under Amul and Sagar brands. Chaudhary is also the Chairman of Mehsana District Cooperatives Milk Producers Union, popularly known as Dudhsagar Dairy since 2005. Mehsana is one of the biggest milk producing cooperatives under the GCMMF.
Things, however, have changed now. Chaudhary, who was a home minister in the Shankarsinh Vaghela government in Gujarat, is believed to be moving closer to the United Progressive Alliance coalition at the Centre. Many link this to his aspirations to become the next chairman of the National Dairy Development Board. Chaudhary recently met Congress Vice President Rahul Gandhi and party MP from Gujarat, Ahmed Patel, according to sources. Earlier this year, Chaudhary also gave away cattle feed worth Rs 22 crore for free to a milk cooperative in Agriculture Minister Sharad Pawar's home state Maharashtra. All this has not gone down well with the state BJP leadership.
GCMMF members opposing Chaudhary claim that the no-confidence motion against him on Oct 23 was a result of his unilateral style of functioning
A number of GCMMF board members opposing Chaudhary claim that the no-confidence motion initiated against him on October 23 was a result of the chairman's unilateral style of functioning. However, off the record, some admit the political angle to it. The board had called a meeting on October 26 to take the motion forward. However, Chaudhary succeeded in getting a stay on the no-confidence resolution from the Gujarat High Court. The court will hear the matter on November 11. Chaudhary was unavailable for comment.
Partisan politics is not new to GCMMF. In 2006, the late Verghese Kurien, widely known as the Father of India's White Revolution, stepped down as Chairman after a 33-year-long tenure because of strong opposition from a section of the board members. In 2012, Parthi Bhatol relinquished the post of chairman and made way for Chaudhary after a revolt against his leadership by some board members. Both Bhatol and Chaudhary had the support of the BJP. Bhatol's son is a BJP MLA from Gujarat. The chairman's post at GCMMF is crucial for BJP keeping in mind the 2014 Lok Sabha elections. The federation deals with 3.2 million milk farmers, has a presence in 90 per cent of Gujarat's villages and can influence a large proportion of the 38 million voters in the state.
Bhatol told Business Today
that Chaudhary's actions are not in line with the policies of a cooperative. "No board meeting has concluded peacefully ever since he took over as the chairman last year," says Bhatol, who heads the Banaskantha Cooper-ative Milk Union. "He sold 7,000 tonnes of milk powder to private buyers at low rates which resulted in a loss of Rs 28 crore for the Mehsana producers. The board had to impose a fine of Rs 11 lakh on the Mehsana Union for this," he adds and claims that Mehsana, which used to be the biggest producer among the 17 cooperatives under GCMMF, is now relegated to the second position while Banaskantha has become number one. "Farmers in Mehsana Dairy get paid less than all the other cooperatives of Gujarat."
Several board members also allege that Chaudhary created excess capacities under Mehsana without approvals of the federation incurring huge investments.
These capacities are sitting idle and the cooperative continues to service high debts raised for these expansions, they claim. Ashwin Sawali, Chairman of Amreli Dairy Federation, said that the board members made several requests to Chaudhary in meetings to mend his ways but he did not change. "If he continues to lead the federation, it will decline. Amul is our pride and we cannot let it go this way."
GCMMF Managing Director R. S. Sodhi too has raised charges against Chaudhary. In a letter to Mehsana Union's vice chairman, Sodhi said that the "union has invested a huge amount without any need and this had led to lot of interest and depreciation burden, resulting in huge losses".
The federation has not suffered any loss under Chaudhary"
Kaira Co-Op Milk Union
Chaudhary's supporters dismiss the allegations. "Under the rules, the federation cannot bring a no-confidence motion and that is why the move was stayed by the Court," says Ramsinh Prabhatsinh Parmar, Chairman of the Kaira Cooperative Milk Union and a board member at GCMMF. " The whole issue is political. We need to keep politics away as this is a farmers' body. The federation has not suffered any loss under Chaudhary's tenure."
The stage appears set for further conflict. GCMMF officials are, however, certain that this will have no impact on the business and brand of Amul.