Major Darjeeling Tea auctioneer, Carritt Moran, is being wound up

Carritt Moran & Co, the second-largest and one of India’s oldest tea auctioneers, is being wound up, bringing to an end a legacy of 134 years. And McLeod Russel India Ltd, the largest tea plantation company and one of Carritt Morgan’s creditors, is set to get control of one of its prized assets, a property having an office-cum-guest house at Coonoor in Tamil Nadu. “Carritt Moran owed money to us against which its assets in Coonoor were mortgaged. We recently got a favourable verdict from the Calcutta High Court,” said Aditya Khaitan, managing director of McLeod Russel. Carritt Moran, along with J Thomas & Co has been controlling the tea-auction industry out of Kolkata — auctioning bulk tea by sourcing from tea plantation companies like McLeod Russel and Jayshree Tea and selling them to marketers like Tata Tea, Hindustan Unilever, Wagh Bakri and also to exporters across the world. Only a fraction of country’s tea produce, mostly premium-grade varieties of Darjeeling Tea, is traded outside the auctioning system and exported directly. It’s not any crisis in the tea industry that has brought down Carrittt Moran, set up in 1877 by two Englishmen, Thomas and Alfred Caritt to deal in tea, coffee and other commodities. In recent times, beyond its auctioning services, Carritt Moran has been involved in financing activities, lending short-term funds to tea producers. Cash flows suddenly suffered when a few of its creditors defaulted, forcing Carritt Moran, in turn, to default on its dues to the planters from whom it sourced teas, triggering panic in the tea trade sector. That was in 2009. Some of the creditors then filed a winding up case in the Calcutta High Court in a bid to recover their dues by selling off the company’s assets. The liquidation of the auctioneer was ordered and an official liquidator appointed to oversee the process. Carritt Moran also owns offices in Guwahati, Siliguri, Cochin, Coimbatore and Bangalore. It had earlier sold off its Kolkata head office to another city-based tea company. With the Calcutta High Court ordering liquidation of all assets of Carritt Moran, McLeod Russel approached the court and argued that since it has a charge against the Coonoor property, it should be set aside, said McLeod Russel chief finance officer, Kamal Baheti. “Carritt Moran owed us around Rs 4.5 crore and we had filed the charge long before the liquidation proceedings started. The court has ordered last week that we have precedence in terms of settlement of creditors.” The incident in 2009 forced Tea Board to adopt a cash-and-carry financing model and better risk management systems suggested by consultancy firm AF Ferguson & Co. Source: DNA India