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Murder of an Indian CEO

On September 21 last year, the day before he was clubbed to death, Lalit Kishore Chaudhary was on the telephone to his local business association, complaining about flooding. Late monsoon rains had exposed the inadequacy of the half-built infrastructure of Greater Noida, an industrial zone on the eastern edge of Delhi, across the Yamuna river from the capital’s centre. Without proper drainage, the wide roads had become waterlogged and, in some places, impassable.
Chaudhary, chief executive of Graziano Trasmissioni India, knew he had far bigger things to worry about than the state of the roads. His factory, producing components for auto makers around the world, was in turmoil, its industrial relations on a knife edge following dismissals and disciplinary action. His management team felt besieged by political forces beyond the factory gates they did not fully understand.
Before the water had drained from the roads, the 47-year-old executive was dead, his skull smashed in by a hammer. The chain of events that led to Chaudhary’s murder is heavily disputed and six months later still the subject of a police investigation.

According to the company and the police, on the morning of September 22, a crowd gathered outside the gates of the Graziano factory in Gautam Buddha, Nagar district. Many were former employees sacked in the preceding months due to disciplinary problems; they were seeking a meeting with management to agree a return to work. But unlike previous gatherings of protesters, the mood quickly turned hostile. The crowd overpowered the factory’s frightened security guards and used a truck to force their way into the plant. Local police were nowhere to be seen, leaving senior management to face the 200 protesters alone.
“It was a violent outburst. It wasn’t very well planned; there was no planning of the murder of the chief executive,” says Surendra Kumar Verma, the local police chief. “The protesters were there to agitate, and the violent mob mentality took hold.”
Early reports suggested Chaudhary was knocked down in the yard as he tried to pacify his assailants. But his company, which is based in Italy and owned by the Swiss industrial group Oerlikon, tells another story. In this version, rioters armed with metal bars and hammers roamed through the factory on a terrifying hunt for the bosses. “He tried to escape the mob by locking himself into one of the offices,” a company spokesman said. “The locked door was broken. He tried to escape again by jumping out of the window and was beaten to death at the very point he landed.” Oerlikon said the riot was “calculated and planned as part of an effort to destroy the relationship between the company and the employees”.
Another senior manager and one of Chaudhary’s closest colleagues, speaking anonymously, describes how he hid under a desk in fear for his life as the mob rampaged through the factory. He is sure that, had he not done so, he would also have been clubbed to death.
Five Italian employees of Graziano who were visiting the factory at the time of the attack also escaped. Had they become victims of the mob, a senior Italian diplomat argues, the incident would have blown up into an international incident. As it is, it is difficult to imagine now the gruesome events that took place just off the wide, dusty streets of Gautam Buddha. Pedestrians don’t know where the Graziano factory stands, let alone what happened there six months earlier.
. . .
By all accounts, Chaudhary was a quiet, diligent man who kept to himself. Business associates say he was dedicated to his job and to his family. They all agree that he was not a belligerent manager, bristling for a fight with labour unions, though some say he became close to local gangsters, or goondas. “He was a nice guy,” remembers one colleague. The chief executive commuted about 30 minutes every day to work. He came from Haryana, a state neighbouring Delhi, and was a graduate of the prestigious Indian Institute of Technology in Kanpur. His widow, Ratna, is a reader at Delhi University’s physics department.
For almost a decade under Chaudhary’s leadership, the Graziano factory ran smoothly. The Italian company was part of a wave of overseas groups drawn to India by the country’s engineering skills and low pay rates. Graziano had been lured to Noida by government offers of land grants and generous tax breaks for foreign investors bringing industrial jobs.
The growth of the auto-parts industry in India is a showcase for the country’s integration in the global economy. India’s strong engineering skills have helped it become a low-cost outsourcing hub for auto companies from the US, Europe and Japan. Analysts estimate that sourcing parts from India is up to 20 per cent cheaper for US carmakers than buying home-grown products, and as much as 50 per cent cheaper for their European counterparts.
Things started to go wrong at the Graziano factory in December 2007. A series of disputes broke out involving the suspension, lockout and dismissal of workers and trainees. The violent confrontation that led to Chaudhary’s murder followed the dismissal of 200 workers in July last year and subsequent efforts to bring some of them back. But those involved say that trouble had long been simmering over the company’s use of contract workers, terms of employment and union representation inside the factory. “The problems were deep-rooted there,” says Rajesh Tyagi, convenor of the Graziano Workers Solidarity Forum and a lawyer at the Supreme Court. He wrote a report cataloguing the steps towards confrontation, based on the testimony of two workers. “For workers, there was a long-term battle against the management,” he says.

People close to the company say that issues such as where workers were dropped off by a bus after their shift, drinking taps said to be too close to the toilets and the quality of the food in the canteen helped inflame an already charged atmosphere. Others say unions, often affiliated with political parties including the communists, radicalised workers and, in some cases, tried to blackmail the company by backing employee protests.
The company has complained that it was besieged by “self-proclaimed” workers’ representatives. “We had some people who became union leaders of a portion of our employees,” said a company spokesman. “They were very extreme, very radical.” An Indian executive at the company says the workers had aligned themselves with the All India Trade Union Congress, the Centre of Indian Trade Unions and Hind Mazdoor Sabha, a left-leaning trade union centre. “We kept on getting letters of complaint [about terms of employment]. There was ever-diminishing production as people created a nuisance inside the plant. We were spending the maximum amount of time in dispute procedures and not on production.” He says the company is still being harassed with letters of complaint by unions.
In the highly factional world of local union politics in India, violence is a frequent feature and enforcement of the rules patchy at best. “Some of the union leaders repeatedly attempted … to impede the operations in Noida with activities illegal under Indian as well as international law,” Graziano said in a statement. But Santosh Roy, the national secretary of the All India Central Council of Trade Unions (AICCTU) and author of another report on the dispute at Graziano, contests this. He says employees were made to work 14-hour shifts for meagre wages and that even during the past three months the “company was not allowing some workers to go home”. “The management didn’t allow unions. If there was a union, [the chief executive] wouldn’t have been killed.”
Workers and management had signed a three-year wage pact in January 2008 and had agreed to mediation by the district labour commissioner, but this had not prevented a strike in May over apprentices and shifts, followed in July by vandalism and dharna, or hunger strikes. As relations deteriorated, the company tried to rid itself of protesters by firing them – a move it later tried to reverse in negotiation with local authorities. Relations between workers and management were deteriorating so quickly by this point that the Italian government became involved, warning the state government of Uttar Pradesh, led by Kumari Mayawati, India’s most powerful low-caste leader, that Graziano was under threat. Nothing happened.
he situation was further inflamed by disputes over land. To bring foreign companies to Noida, the government of Uttar Pradesh, one of the poorest states in India, had made agricultural land available for factories. The scheme had stoked local resentment among dispossessed farm labourers. “Steadily, the government is taking farmers’ land and now youths are unemployed,” says Aditya Ghildiyal, president of the Greater Noida Industries Association, and who works at the New Holland tractor plant next door to Graziano. “The money given for the sale of land runs out.”
Comparisons have been drawn, mainly by union leaders, with a more high-profile dispute about plans by Tata Motors to open a car plant in West Bengal – a factory that would have produced the Nano, a flagship of India’s technical advances. Farmers, backed by Trinamool Congress, at the time in opposition, laid siege to the proposed site. Activists staged protests demanding that the government return 400 acres of land to farmers who had not accepted compensation for their relocation. Tata finally gave in and moved the project to the western state of Gujarat.
. . .
Following Chaudhary’s murder, police arrested 136 people in connection with the rioting at the plant. Graziano Workers’ Solidarity Forum, a group of lawyers, academics and unionists formed in the days after the killing, has been campaigning for the release of some of those people. Its version of events that day is in stark contrast to the company’s. The group says that workers whom Graziano had earlier suspended were called to the factory two-by-two to make a formal apology for their conduct. If they showed contrition, they were offered reinstatement. While the apologies were being heard, a scuffle broke out, the group says. A shot was fired by a security guard and a tense stand-off broke into open conflict. Once the fighting had subsided, Chaudhary was found among the 34 injured. He was rushed to hospital but efforts to revive him proved useless.
The report by the AICCTU is even more damning of the company. “On the day of the incident, police remained absent at the behest of the Graziano authorities, who planned to get the leading elements of the agitation beaten up after getting them inside the factory premises on the pretext of talks,” says the report. “While the workers’ delegation was inside and being assaulted, one worker ran out to the gates and told those assembled outside that their comrades within were being beaten. Then, workers stormed in and the confrontation took place which resulted in the CEO getting killed.”
The police deny that there were gun shots, but say that if the company was attempting to extract apologies from its former workers, it should have had better security in place. The company, meanwhile, described early reports of the events surrounding Chaudhary’s killing as “completely misleading”. Graziano’s senior management in Italy said it did not agree with reports issued by the unions or the Graziano Workers’ Solidarity Forum. It said workers’ leaders had taken as a pretext a company decision not to employ five trainees at the end of their probation to start strikes and other actions that led to the injury of employees and damage to equipment. The company responded with dismissals and a lock-out. It said the ”horrible acts” of September 22 by “a huge mob” had come without any warning.

The AICCTU report, compiled by Roy, portrays the Graziano factory as a prison camp, where workers were intimidated and abused by a hated security company called Awake. The report alleges that of the 1,200 employees, only 500 had regular, full-time posts – the rest were on contracts. Regular workers were paid Rs3,200 (£44) a month for a 12-hour day; contract workers received Rs2,200 (£31) a month.
The Graziano Workers’ Solidarity Forum accuses the company of “super-exploitation of the labour of poor workers”. In a timeline published on several websites, the group describes a tough management regime that harassed workers and forced them to accept low-paid contract work. In one striking episode, it claims that the Graziano management switched off the cooling system on the factory floor to punish workers. “The employers did everything in their control to curb the protest of workers, from suspension to lock-out to outright intimidation,” it alleges.
And yet the group says the workers did not take up arms in revenge for working conditions. In a letter to the labour ministry, it accuses rival business interests of orchestrating the attack that led to Chaudhary’s death.
Others seem to agree – although the identity of those said to be responsible is never clear. “It’s very sad that this is what happened,” says Aditya Ghildiyal at the Greater Noida Industries Association. “From the industrial point of view, there must be the hand of outsiders. Companies coming out here have stopped because of what the newspapers are saying about what happened to the Italian company’s chief executive.”
. . .
Shocking though it was, the murder of Chaudhary was hardly an isolated incident in the area. In a 48-hour period in January, police reported a rape, kidnap, shooting and stabbing. Even the police acknowledge that Noida’s reputation for lawlessness is deserved. “Sometimes we are ahead of the criminals, at other times they are [ahead of us],” lamented Uttar Pradesh police superintendent Ashok Kumar Tripathi. Criminal gangs come on raids from the nearby town. Kidnapping is common. Farmers who have lost their land turn to stealing to support themselves.
“Rents are very cheap because the safety and security is so bad,” says Ghildiyal at the local business association. “In Greater Noida there is no police protection. The street lighting is bad. There are electricity shortages. Thugs come around. The police are not trained for industrial security.” Within days of the Graziano attack, another chief executive, this time the head of a US software company, Expedien eSolutions, had to fight off three assailants who were trying to hijack his car.
Industrial protests are also commonplace, and sometimes lead to violence. In 2004, an attack by workers on Jaypee Greens, a property developer, led to one death. About 125 workers and 10 police were injured when employees at a now-deserted factory owned by Daewoo, the Korean industrial group, marched on the company office. Hindon Rubber wound up its operations last year after employee protests.
Nor are violent workplace confrontations confined to Noida: one of the most serious protests took place on the other side of Delhi, in another fast-developing satellite city, Gurgaon. There, clashes between workers and police at Honda’s motorcycle and scooter plant in July 2005 saw 3,000 workers march on the factory. About 400 people were arrested, of whom 63 were jailed. In Graziano’s case, several days passed before police rounded up and charged people in connection with the rioting. According to staff at the factory and members of the business community, some of those involved remain at large and are active in local politics. The plant, they say, is still under threat. “Again [the unions] are trying to create problems for us [with complaints],” says one manager.
Rome, meanwhile, called the events leading up to Chaudhary’s death “totally incomprehensible and unjustifiable”, and pressed New Delhi to issue “words of reassurance” and to put in place security measures that would restore a “climate of confidence”. The reaction from Indian politicians was more equivocal. Oscar Fernandes, the then labour minister (he resigned this month) and a confidant of Sonia Gandhi, the president of the ruling Congress Party, was forced to apologise for remarks in which he appeared to defend the actions of the rioters and criticise the company for using contract workers (a practice the company doesn’t deny). The attack “should serve as a warning for management”, he said.
Following his remarks, Kamal Nath, the commerce and industry minister and India’s chief trade negotiator, tried to calm frayed tempers among international investors. Describing the violence as a “stray occurrence”, Nath argued it was “completely at variance with the Indian culture and tradition of peace”.
And yet Fernandes was not alone; his words betrayed a deep-seated distrust of foreign capital that lurks behind India’s seemingly enthusiastic transformation from a largely agrarian economy to a more industrial one.
. . .
Today, the Graziano plant is under heavy guard; its Swiss owner has only just appointed a replacement for Chaudhary – Vivek Prakash, a veteran of the motor industry. Outside the sheet-metal gates, security guards with shotguns eye passers-by and workers reporting for duty. The factory has all the attributes you would find in a European counterpart, boasts Marcello Lamberto, Graziano Trasmissioni’s worldwide chief executive – except the wage structure.
The incident continues to perplex Graziano’s executives, who acknowledge that the investment made in the plant makes it almost impossible to pull out. It closed for just a few days after the murder; three months later, production had returned to 75 per cent of capacity. But the scars run deeper than those numbers might suggest. And efforts to ensure a cooling-off since the attack have been hampered by agitation from Europe: Indian workers and their representatives have received messages of support from far-left groups in Italy.
The mood at other companies in Noida is glum. “Big companies have taken their own security measures,” says Aditya Ghildiyal at the local business association. “They have put up CCTV systems, they now have two entry barriers and they are checking under cars with mirrors.”
Ghildiyal continues: “There’s more focus on the elections [in April and May] right now. Industries are taking extra security measures. There’s an increase of kidnappings for ransom before elections. The reason is that money needs to be spent on politicians’ election campaigns. Parties need funds at this time. This is something industrialists are worried about. Some are not even picking up the phone.”
Justice in India, meanwhile, arrives slowly, and sometimes not at all. Of the 136 people arrested, 72 who were charged with minor offences have been released, but 64 – those facing charges of murder or attempted murder – remain in Dasna jail in Ghaziabad. They recently had their application for bail rejected. In the worst cases, where the charges stick, a jail sentence might only be for five to 10 years. And it remains unclear who exactly struck the fatal blows.
“When a mob is involved, no one gets penalised,” says Ghildiyal. “Things subside. Nothing happens. After a number of years, they will be set free. Yes. Someone has been killed. But you can’t justify holding them for so long.”


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