Tea giant Finley sells business to local group |
James & Finley, one of the oldest foreign tea companies in the country, is winding up its business due to changes in government policy and internal management problem.
A business consortium, comprising eight leading local entrepreneurs, has bought 17 large tea gardens and other properties of the UK-based multinational company in Sylhet at Tk 380 crore, sources said.
This is going to be the biggest takeover of a foreign company by local entrepreneurs, according to the country's private sector business circle. No such previous business takeover ever crossed Tk 300 crore in a single deal.
The James & Finley is one of the biggest tea companies in the country with over 16,000 officials and employees under its umbrella and producing tea since the time of British rule in the subcontinent.
Recent policy changes of the government regarding leasing of land for tea gardens may have forced the foreign investors to wind up business from the country, sources pointed out. The government used to lease out land to tea gardens for 99 years but now the period has been cut to 35 years.
The government also recently withdrew the subsidy for rationing of food for the tea workers, causing additional expenditure for the company. The company's internal management problem might be also causing the closure, the sources observed.
Asked about the authenticity of the news, Shafiq Chowdhury, chief executive officer (estate) of James & Finley in Moulvibazar, however, said, "I have heard it but I am yet to be officially informed."
Although the company authority is keeping the deal secret, sources inside confirmed the fact. The selling of the company's tea gardens and other properties has been finalised and a memorandum of understanding (MoU) was signed between the two parties recently, they said. A formal handover ceremony is scheduled for February 7.
According to the MoU, the existing management of the gardens will remain unchanged for one year and formal process of handover of the tea gardens and other properties to the local buyers will start from 2007.
"It is true that the Bangladesh stake of the James & Finley is being sold out and the Ispahani group is buying 10 percent of the share," said one of the directors of Ispahani Group.
Sources said a former president of the Dhaka Chamber of Commerce and Industry, three owners of leading ship-breaking industries in Chittagong, an MP from the treasury bench, a former chairman of a private bank, and a few Singapore-based Bangladeshi entrepreneurs are also in the consortium.
A top businessman of Chittagong who has large ship-breaking industries in Sitakunda is said to be taking the largest share of the tea gardens. He, however, denied any such deal, saying, "Once such an offer was made to me but later the company retreated from its decision of selling properties."
But a number of business sources confirmed his involvement in the purchase worth over Tk 200 crore of the tea gardens.
Earlier, some tea gardens of the James & Finley in India were sold to Indian conglomerate Tata Group.
Meanwhile, an expert observed that such traditional tea companies should not go in the hands of those who are not involved with the business. Disturbance in a company like the James & Finley may lead to disaster in the country's entire tea industry, he feared.
Although the tea industry is one of the largest employers in the country, it has been suffering from government negligence, he said.