Bhagyalakshmi Tea found shortchanging buyers

The firm sold lower quality product at Guwahati auction

Bhagyalakshmi Tea Company (BTC), a participant at the Guwahati Tea Auction Centre (GTAC), has been found to be indulging in fraudulent practices by a special investigation team formed by the auction centre. The tea company owns two tea marks — Nahorguri and Kaziranga (named after its two tea gardens).

The company was found to have displayed samples of the original mark (premium quality) to buyers at GTAC before the teas were auctioned, but later supplied teas of inferior quality, said the report, a copy of which is with Business Standard.

Repeated attempts to contact Bhaskar Barkakoty, the owner of BTC, proved futile.

The SIT was formed by GTAC after the buyers reported problems at two warehouses storing BTC teas.

It was found by the SIT that Barkakoty, who ran into a financial crisis in the latter half of 2008, could not supply adequate tea from the Nahorguri and Kaziranga tea gardens to meet the demand. He was found to be “influencing the two warehouses — Khemka Tea Warehousing Corporation and Laxmi Tea Warehousing Corporation — to issue an Arrival and Weighment Report (AWR) to Eastern Tea Brokers, without the teas actually being received by the warehouses.”

Eastern Tea Brokers sold teas on behalf of GTAC.

Furthermore, the SIT found that Barkakoty influenced the two warehouse owners to blend inferior quality teas to meet the demand.

According to the SIT report, the owners of the two warehouses – Sanjay Khemka and Manoj Surana — were found guilty of grossly violating the GTAC rules and were party to all the fraudulent activities in connivance with Barkakoty and Eastern Tea Brokers.

At times, Barkakoty was found buying his own teas at GTAC to artificially hike the prices, found the SIT.

Barkakoty had even managed to obtain loan from IndusInd Bank against those ‘non-existent’ teas, based on the recommendations and valuations given by Eastern Tea Brokers and the lien letters issued by the warehouses, found the committee.

Jayanta Kakaty, secretary of GTAC, told Business Standard that the SIT report, which found Barkakaty, along with the owners of two warehouses and a broker guilty, would be “considered” at a meeting of the core committee of GTAC to be held later today and any decision pertaining to it would be taken by the committee in the coming days. 

He also said that the committee might decide on taking “few measures” to regain the trust of the buyers at GTAC.

Sources said that following the submission of the SIT report, the two warehouses have been suspended by GTAC with immediate effect and the tea stocks under the both the marks would be moved to other warehouses.

They also added that since GTAC was licensed by the Tea Board, the latter held the right of intervention if it was not satisfied with the GTAC action.

“This very scam may tarnish the brand image of Assam Tea,” said Dipanjol Deka, secretary of Tea Association of India (TAI), who was also a member of the special investigation team.

“Everything runs on trust here. Buyers just check the samples before buying and not the lot. Now, whoever had purchased Nahorguri and Kaziranga teas in the recent auctions will discover that in reality the tea they have received are of inferior quality. It is not only tarnishing the image of Assam Tea but also of GTAC,” added Deka.