Amul chairman may get the axe

14 of 17 board members move no-confidence motion; proximity to Rahul Gandhi seen as trigger

With as many as 14 of the 17 elected directors of Amul moving a no-confidence motion against him, Chairman Vipul Chaudhary stares at a situation similar to that faced by his predecessors, Verghese Kurien and Parthi Bhatol, of a possible ouster.

A source familiar with the development at Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the Amul brand and had a Rs 13,735-crore turnover in 2012-13, informed: “A requisition meeting of the directors will be convened on October 26 in this regard.” About the no-confidence motion, Chaudhary said “I am not aware of any such thing”, but those closely associated with the federation cited reasons ranging from internal conflicts to political overtures.

Chaudhary had recently been seen accompanying Congress Vice-President Rahul Gandhi during the latter’s visit to Ahmedabad and many read in this Chaudhary’s aspiration to be chairman of the National Dairy Development Board (NDDB). This, according to sources, has led to problems for him within the federation, where a majority of directors are backed by the Bharatiya Janata Party (BJP).

It is leant that his meeting with Gandhi was arranged by his mentor and Congress leader Shankarsinh Vaghela. “The Congress has been luring Chaudhary with the chairmanship of NDDB, which falls vacant later this month when incumbent Amrita Patel steps down,” sources said. According to BJP members, Chaudhary, who also heads the Mehsana District Cooperative Milk Producers’ Union (popularly known as Dudhsagar Dairy and one of the largest member unions of GCMMF, has been Patel’s rival.

This is not the first instance of a revolt at GCMMF. The previous two chairmen, Kurien and Bhatol, had faced similar oppositions — in 2006 and 2010, respectively. While Kurien chose to step down before a no-confidence motion against him, Bhatol survived the no-trust vote, with BJP’s backing amid high drama. Interestingly, it was Chaudhary who had led the revolt against Bhatol.

Besides, when Shankarsinh Vaghela brought down the then BJP government in the state in 1996-97, Chaudhary was seen as instrumental. Vaghela later formed a new government of the Rashtriya Janata Party (RJP), with Congress as an ally, and Chaudhary was made the state’s home minister. But the government fell after 22 months and as Vaghela dissolved RJP to join the Congress, Chaudhary followed him. In 2007, Chaudhary joined BJP at a function in Mehsana and was inducted by Chief Minister Narendra Modi.

His unopposed election as GCMMF’s chairman in 2012 was seen as a reward for his closeness to Modi. BJP members said many members of the federation had not opposed his appointment only because he had Modi’s backing.

However, when contacted, a GCMMF board member, asking not to be named, told Business Standard the Mehsana Union, headed by Chaudhary, had recently made some allegations against the federation and that was what might have irked the members and led to the no-confidence motion. In fact, GCMMF had on October 23 sent a letter to the Mehsana Union’s vice-chairman and answered the issues raised by the union.

In the letter, issued by GCMMF Managing Director R S Sodhi, the federation took on the union over a number of issues, including big loans availed of the latter, offering cattlefeed worth Rs 22.50 crore to Maharashtra farmers for free (without taking the approval of union’s board) and selling milk powder to private players at lower rates against the federation’s advice.

The union is facing GCMMF’s attack also because of constant decline in milk procurement by it and setting up of a 900,000-litres-a-day milk processing plant. Also, the union set up a three-million-litres-a-day milk packaging plant at Daruheda, with an investment of Rs 300 crore.