What’s ailing Kitex, the world’s second-largest infant garments brand?

Kitex Garments, a Kerala-based listed garment exporter with a market cap of about Rs 1,200 crore, has courted fresh troubles. It employs more than 5,500 workers and its clients include American majors like Walmart, Amazon and Target. On December 25, two groups of clashing workers at the company’s labour camp first attacked the security staff. The events took an ugly turn when the police were called in.

Eight policemen were injured and their vehicle was torched. The police promptly detained 164 workers, all of whom were migrant labourers. The cause of clash between two worker groups is still a mystery. The next day Kitex MD Sabu Jacob said that only 23 people were involved in the crime and the remaining workers were wrongly charged and detained. He said, this was an attempt to carry out political vendetta against Kitex and him. The local MLA asked for Kitex management to be held responsible for escalating the violence. We must note that Kitex had launched a political party called Twenty20 through its CSR arm. Business Standard’s Shine Jacob explains the political angle behind Kitex’s frequent run-ins with the state government and its authorities: In the Assembly constituency where the headquarters of Kitex is located, Twenty20 gave a tough contest to both Congress and CPI(M) by securing 28% of the votes. It’s difficult to establish a clear link between the expanding voter base of Twenty20 and the action taken by authorities against Kitex. But the company has constantly used the argument that Kerala is not a business-friendly state, to justify its stand. The Kitex example shows that when a corporate gets directly involved in politics, it cannot be kept separate from its business. It is evident that the current labour unrest at Kitex gives an opportunity for other parties to intensify their fight against Twenty20. Kitex and Sabu Jacob have to contend with the fact that they are irreversibly intertwined with the political ecosystem – something that’s not favourable for the business.

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