NEPAL: MAOISTS DENY COCA-COLA EXTORTION

C O N F I D E N T I A L KATHMANDU 000366

SIPDIS

STATE FOR SA/INS AND DS/IP/SA
LONDON FOR POL - RIEDEL
TREASURY FOR OFAC - NEWCOMB

E.O. 12958: DECL: 02/27/2013
TAGS: PTER PINS BEXP ASEC CASC NP
SUBJECT: NEPAL: MAOISTS DENY COCA-COLA EXTORTION

REF: KATHMANDU 0352

Classified By: AMB. MICHAEL E. MALINOWSKI. REASON: 1.5 (B,D)


1. (C) On February 28 Narayan Singh Pun, Minister for
Physical Works and government-appointed interlocutor with
Maoist insurgents, called the Ambassador to report that he
had, as requested, raised with his Maoist contacts the
continued extortion of funds from Coca-Cola's local
representative (Reftel). (Note: As requested by Coca-Cola
and the Ambassador, Pun did not mention the company by name
in his discussion. End note.) His Maoist interlocutors
vigorously denied that their leadership has either sanctioned
or encouraged such activities since the January 29 ceasefire,
Pun told the Ambassador. The Maoists suggested that the
extortion may have been carried out by imposters, and claimed
that bogus "humanitarian organizations" pressing for
"donations" from the international community to support the
peace process had succeeded in raising as much as USD 1
million. When told that the extortion demand had been
accompanied by a signed letter from Maoist leader Prachanda
that appeared authentic, Pun's interlocutors asked for a copy
of the letter, as well as the name of the person who had
demanded the money, and assured him that appropriate action
would be taken against any errant cadre violating the
directive against extortion. Pun told the Ambassador he
would pass a copy of the extortion letter, as well as any
additional information, to his Maoist contacts, if desired.



2. (C) Poloff advised Coca-Cola Country Manager N.N. Singh
of Pun's offer and asked for permission to pass a copy of the
extortion letter received by Coca-Cola, with the company's
name and any other identifying information excised from the
text. Poloff also asked if she could pass on the name
(assumed to be a nom de guerre) of the extortionist. Singh
expressed concern that even passing on the Maoist alias could
be dangerous, citing Maoist killings of alleged "informants,"
including two U.S. Embassy guards, as examples. After
discussing the matter with Coca-Cola's regional office in
Bangkok, Singh told poloff that the company did not want to
release a copy of the letter--even without identifying
information--or the name of the extortionist to the Maoists.
Poloff agreed not to supply the information. Singh said he
would attempt to parry any future demands for funds by saying
he had not received authorization to pay from Coca-Cola
corporate headquarters.


3. (C) Comment: Singh's reaction indicates just how
successful the Maoists have been in intimidating the local
population. Even members of the well-connected business
elite like the Country Manager for the largest multinational
firm in Nepal are too fearful to take action against
low-ranking Maoist couriers--ceasefire or no ceasefire. We
will continue to explore, along with other embassies and
their respective bilateral business chambers, the issuing of
a joint public statement condemning the continued extortion.

MALINOWSKI