Amul Dairy MD K Rathnam resigns amid corruption allegation, Board denies charges

K. Rathnam stepped down as the managing-director of Amul Dairy on Saturday following a high-level meeting of top company officials.
Rathnam's resignation comes amid allegations of a Rs 450-crore fraud at the Anand-based Kaira District Co-operative Milk Producers Union Limited (KDCMPUL), popularly known as Amul Dairy.
 
Sources quoted by PTI, however, said that the board members dismissed that the development was a fallout of the alleged fraud. In his resignation letter, the former MD cited 'personal reasons' behind his decision to step down.

K. Rathnam

Milk cooperatives Chairman Ramsinh Parmar, too, toed a similar line, saying that Rathnam, who was elevated as the managing director of Amul in 2014, did not resign over these (corruption) allegations, but because of family reasons.
 
According to his resignation letter, Rathnam, 55, was keen on spending some time with his family living in Tamil Nadu and the US. "I have been thinking of resigning for sometime now. I have worked with Amul for almost 22 years and wanted to do something on my own in the next 10-15 years. I also wanted to spend time with family members in the US and Tamil Nadu."
 
Jayen Mehta, who was the senior general manager in the planning and marketing wing of the company, will take charge as the MD of Kaira Milk Union, a statement issued by Amul Dairy said.
 
The KDCMPUL is one of the 18 district co-operative milk producer unions affiliated to the Gujarat Co-operative Milk Marketing Federation Limited, which markets milk and milk products under the "Amul" and "Sagar" brands.
 
News reports said that internal problems within KDCMPUL started in 2015 when three BJP-backed candidates had got elected to the dairy's board for the first time. The board was traditionally a Congress stronghold, where the party enjoyed majority with nine candidates of the total 14 members.
 
In the 2015 dairy polls, the Congress panel led by Ramsinh Parmar had won a total of 10 seats. The new BJP directors, including Petlad APMC chairmen Tejas Patel, Vipul Patel and Rajesh Pathak, alleged that Parmar and his team had violated co-operative laws.
 
Things took a hundred and eighty degree turn after Parmar joined the BJP just ahead of the Rajya Sabha election last year. Following that, Ramsinh got elected as the chairman of Gujarat Co-operative Milk Marketing Federation (GCMMF), which controls all the 18 district dairy unions in Gujarat, in January this year.
 
His deputy and Amul Dairy's vice-chairman Rajendrasinh Parmar, who was still with Congress, had sought an internal probe into allegations of graft worth Rs 350 crore (initial charges) against MD K Rathnam on November 2017 for bypassing the tendering process and illegal recruitments.
 
A five-member committee, including Rajendrasinh and Tejas Patel among others, was constituted to probe the charges. In February, Rajendrasinh had sent out letters to all village-level milk societies stating that the probe was making no headway. Reacting to this letters, Parmar had sent out circulars  to all the 'mandalis' refuting all the allegations.
After the board meeting on Saturday, Parmar termed the corruption allegations as "perpetuated by rumour-mongers".