The Second Leg

The night before, Karnataka Chief Minister H.D. Deve Gowda had told Outlook : "No mercy will be shown to these KRRS people." And as for the complaint by TNCs that the government had issued no statements about the demolition, he said: "You can't expect me to make a statement about every law and order problem in the state. The point is that there should be no doubt about the government's commitment to KFC and other foreign investors in the state." The KRRS activists have been charged with criminal trespass and rioting, and remanded to judicial custody till February 12. Meantime, taking no chances, the Delhi government posted three grim policemen outside KFC's other outlet, in Delhi's New Friends Colony. 

"The attack on KFC was just to tell the world that TNCs will not be tolerated here," Nanjunda  swamy told Outlook 20 hours before he was arrested. This was the same man who three years ago instigated his followers to ransack the office and factory of Cargill Seeds India. While Cargill's seeds business related directly to farmers, Nanjundaswamy's anti-KFC message to his flock is that the growing TNC-affiliated meat and poultry industry endangers the country's food security and agricultural infrastructure.

"The fast food chains entering India are just a facade. They are here to introduce new farming techniques and crop varieties in response to their specific needs," says the chain-smoking former law teacher. Nanjundaswamy contends the meat and poultry industry consumes 140 million tonnes of foodgrains to produce 20 million tonnes of meat. "This is the reason why millions of poor people in Third World countries such as ours go hungry."

 After Nanjundaswamy issued a warning to the company to close shop within a week or face eviction on July 30 last year, city Police Commissioner T. Srinivasulu posted a platoon of state reserved police outside the outlet. They were withdrawn two weeks before the January 30 attack. "The platoon was removed as we felt that the threat perception to KFC had reduced and did not warrant its presence," says Srinivasulu. "Besides, KFC's local managers started hinting that continued police presence in front of their outlet could discomfiture customers."

Though Nanjundaswamy has been arrested, Srinivasulu's men have their duty cut out for the next few months considering KRRS has threatened to target KFC again, besides other TNCs in the city. Forty-seven transnational establishments in the city have been identified and policemen posted to provide security. Says the commissioner: "The security cover will continue for as long as there isa threat perception."

The beleaguered restaurant got an expert team of architects and engineers working round the clock to get the Bangalore unit back in shape. Naturally, it is banking heavily on the support of the Karnataka government. Ajay Banga, director, marketing and business development, PRRI, points out: "Nanjundaswamy can do it again only if we as a public and a government allow it to happen."

 Banga insists that the latest incident has in no way affected Pepsico Inc's India plans. Says he: "Despite the amount of problems Pepsi has faced in India over the last six or seven years, even before KFC, the company has pumped in more investment. Pepsi has a very strong belief in the Indian market and the Indian legal system." Banga, however, admits that the company could in future face some diffi-culty in getting property on lease, following the threat to its chain. But this, he says, is not an intractable problem.

However, other TNCs in Bangalore are clearly shaken by the incident. In fact, most are not even willing to go on record with their reactions. Says a spokesperson of an American computer hardware company: "Why should I say something and invite the KRRs fellows to my lobby to create trouble?" John Hamilton, chief of The Australia India Co, former chairman of the Indo-American Chamber of Commerce, and the CEO of Cargill Seeds when KRRS attacked the seed manufacturer, is more forthcoming: "It is fair to say that people, not just investors but even Indians, are put off. It is sad that a small backyard politician without a credible agenda can fuel a bunch of villagers to indulge in vandalism. How would you like a bunch of US basketball players smashing up an Indian restaurant in Washington DC just because they don't like what is served?"

Hamilton feels the incident could worry prospective investors. He feels that, till the arrest, the government had been preferring to deal with the effect by posting policemen to guard TNCs in Bangalore rather than come to grips with the cause by prosecuting them aggressively. Indeed, the government has not prosecuted anyone till date for the Cargill savagery.

Till the night of February 2, spokespersons for the chief minister were brushing off the attack on KFC as a law-and-order problem and the state home secretary was stating that Kentucky will be allowed to continue frying its chicken. This, clearly, was not the serious reaction that investors and TNCs were expecting from the government.

Whatever the reasons for the state government initially chickening out from giving an official assurance to TNCs—the goings-on in the National Front or the hankering for Lok Sabha tickets in Bangalore—the fact that it finally moved should bring some cheer to TNCs and potential investors. But it will be foolhardy to expect that we have heard the last of Nanjundaswamy.