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PERSONALITY
It all started with milk
How the cookie crumbled |
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The PONTY mystery While he lived, Ponty drew attention for his business acumen, which turned into gold any trade he touched, even as no outsider could really claim to know much about him. His death has been no less mysterious. By Shahira Naim
Wave
Inc., the industrial conglomerate owned by 55-year-old Gurdeep Singh ‘Ponty’ Chadha and his family and officially valued at Rs 2,500 crore, virtually follows no rule in the conventional rulebook of conducting business. Much like its actual worth, which sources claim could easily be an extra ‘0’ (Rs 25,000 crore), details are hazy about the diversified business which was first started by Ponty’s father, Kulwant Singh Chadha, in the 50s by setting up a liquor shop at Ramnagar, now in Uttarakhand. Since then, the business portfolio of the Chadhas has grown to include vast interests in sugar and paper manufacturing, distilleries, real estate, multiplexes and liquor retail management. What is politely described as the ‘liquor retail management’ on the company’s official website is in fact the art of becoming the lone wholesaler for liquor in Uttar Pradesh — a Rs 14,000-crore business as per the 2011 figures — by elbowing out all other players.
United they fell PR not for him Business houses usually have PR departments, but Chadha’s empire was conspicuous by its ‘invisibility’. It had no high-profile PR exercises to launch new projects, no press meets, interviews, page 3 parties, free junkets and Diwali gifts. Ponty was best served by a few friends in the media who were his eyes and ears in the corridors of power. ASSOCHAM Secretary-General DS Rawat says industrialists like Ponty Chadha have no public profile. “The business philosophy of people like him is an anti-thesis of what industrial bodies strive for. While we want liberalisation, transparency and a level playing field for all businesses, people like Ponty thrive on secrecy and permit-license-quota raj,” he says. What many saw as crony capitalism, Ponty learnt how to get around rules if they didn’t suit him. Old-timers recall that the first major political contact that he made was the then BJP Chief Minister, Kalyan Singh, in the early ’90s. Kalyan Singh’s son Rajvir was reportedly his business associate in the liquor retail trade in west Uttar Pradesh. It was during Kalyan Singh’s tenures that the group diversified into sugar manufacturing and paper making.
Cultivating politicians A senior BJP minister, now an MLA, was close to Ponty who would allegedly pay mobile bills of the minister’s staff. Such gestures were used by him early in his career to cultivate politicians and their hangers-on to find his way in the corridors of power in UP, Uttarakhand and Punjab. Later, he did not need intermediaries as he had direct access to the top brass in the governments. A reclusive politician like Mayawati is said to have personally attended his phone calls and took his advice seriously. The fall of senior party leader Babu Singh Kushwaha from grace is believed to be largely due to Ponty’s negative feedback. His liquor and sugar mills flourished during Mulayam Singh Yadav’s previous regime and he donated generously to all political parties. His son Manpreet ‘Monty’ was present at the swearing-in ceremony of Akhilesh Yadav as Chief Minister. The government has now decided to withdraw all cases against Ponty in the state. While not unfamiliar with the advantage that political friendships bring, Ponty’s meteoric rise came during the 2007-2012 BSP rule, when virtually every major contract went his way — be it in liquor retail, real estate, mining or sugarcane industry. Erstwhile bigwigs in the liquor trade like Jawahar Lal Jaiswal, Badri Prasad Jaiswal, Rakesh Pandey and Ashok Wadia, were put out of business after Ponty secured the entire wholesale rights of liquor and liquor vends in a dozen lucrative districts of west UP. In Lucknow alone, he owned 18 beer shops, 92 country liquor shops, 35 model shops and 115 foreign liquor shops. In the entire state, 16,000 big and small liquor shops were being run by him. The conjecture of an unknown person present at the time of the Chattarpur farmhouse shootout that killed Ponty and his younger brother is based on the theory of out-of-job liquor traders conspiring to eliminate Ponty to regain entry into the liquor trade. His real estate business in Nodia and Greater Noida allegedly aided by the Mayawati government was challenged on September 25, when the Supreme Court issued a notice to the Uttar Pradesh Government on a petition challenging the allotment of land to Ponty. The petition was filed by 94 farmers whose land was acquired by the government. For years, like “Mr India”, Ponty lived far away from the prying eyes of the media. His daughter’s lavish wedding in Dubai, attended by business tycoons, politicians and film stars, was not projected as another “fat Indian wedding”.
Income tax raids He hit the limelight when the income tax department conducted raids at his 25 houses and business establishments in several cities. A sum of Rs 125 crore was reportedly unearthed at one site alone. The officials were investigating his links in the Rs 5,000-crore NRHM scam and the possible flow of funds from West Asia through the hawala route into his businesses. While there was no follow-up in the cases, the myth of his “splendid isolation” exploded. Nine months later, he hit the headlines again when he and his brother were shot in an ugly duel at their farmhouse in Delhi.
Mayawati’s largesse Mayawati’s rule was instrumental in making Ponty the liquor baron of Uttar Pradesh by allegedly tailoring excise policies to strengthen his monopoly. He became the sole distributor of liquor in the state, allegedly even charging above the MRP. The excise policy continues under Akhilesh Yadav and will come up for renewal in March 2013. During Mayawati’s regime, Ponty was also the main beneficiary of the government’s decision to divest stakes in 11 sugar mills owned by the state’s sugar corporation. The Comptroller and Auditor General had indicted the BSP government for the deal, believed to have caused a loss of Rs 2,000 crore to the exchequer. After dithering in taking action for months, Akhilesh Yadav’s government finally ordered a Lokayukt probe into the controversial sugar mill deal on November 6.
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It all started with milk Starting with a “bhang” and liquor vend in the early 50s, they continued to progress and diversify. In 1963, they took to sugarcane crushing. The Chadha family soon ventured into other areas like finance, real estate, cinema halls, hotels, flour mills, rubber, brassware and paper mills, besides the export of handicraft. Before Ponty came on the scene, his father Kulwant Singh Chadha and uncle Harbhajan Singh had already put the family on sound financial footing. Family insiders claim that when all six brothers went for settlement more than two decades ago, each of them ended up with assets and businesses worth over Rs 100 crore each. While Harbhajan Singh stayed back in Moradabad, where the group still controls the liquor trade, runs cinemas, brass sheets and brassware business, etc., the others moved to Mumbai, Delhi and Noida, but continued to be associated with the parental Chadha group. Their film distribution work, Ginni Arts, went to Ginni Chadha, son of Narinder Singh Chadha (Kulwant’s brother). Business over degrees Formal education was not a priority for the family as “business runs in the veins and arteries of the Chadhas”. Instead of going for academic degrees, the first and second generation of the Chadhas evinced more interest in their various businesses. Ponty had lost three-fourths of his left arm and two fingers of his right hand in a freak electrocution incident. He had dropped out of school while in class IX. His son Monty, also a dropout, is at the helm of affairs of Wave and looks after real estate projects of the group. Cracks appear Problems started, after Kulwant Singh died in 2011. Though Ponty Chadha was the undisputed empire builder after taking over the reins of the Chadha group from his father and uncles, he started losing control following reported dissent from his brother Hardeep Singh Chadha, alias Satnam. Between 1997 and 2006, Ponty had spread the Chadha empire beyond Uttar Pradesh and Uttarakhand by monopolising liquor trade — both retail and wholesale — not only in Punjab, but also in Chandigarh. Simultaneously, Ponty rapidly diversified into real estate and infrastructure building in a big way. Ponty signed agreements with leading liquor and beer brands while diversifying into production, besides becoming a major supplier of extra neutral alcohol (ENA) to major liquor companies in the country. One of his latest acquisitions was the Lucknow-based brewery of the Mohan Meakins group. His Wave Beer, reveal industry insiders, has monopoly in Uttar Pradesh now. When he ran the liquor trade in Punjab, his Silver Peg was the dominant Indian Made Foreign Liquor (IMFL) in the region. He resigned from Wave Group early this year, but continued with distribution and also ventured into film production with his maiden film, “Jo Bole So Nihal”, featuring Sunny Deol. This was in step with the family’s commitment to religion in general and Sikhism in particular. Some of the sugar and paper mills owned by the erstwhile Chadha Group have gurdwaras on their premises, where recitation of Gurbani is a regular feature.
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How the cookie crumbled
Having
decided to run separate businesses, the Chadha brothers — Ponty and Hardeep — had been persuaded by family elders to demarcate their areas of operations. It was like a “non-competing” clause, akin to the one inked between the feuding Ambani brothers. Ponty was to work in Uttar Pradesh while his younger brother, 40-year-old Hardeep, focused on his own businesses in sugar and paper mills, real estate and distilleries in Punjab and elsewhere. The arrangement had been worked out verbally, but was yet to be put on paper, family sources say. A leading Delhi-based law firm had been hired for the paper work. The business interests of the two brothers overlapped in some areas like sugar, distilleries, paper mills and real estate, and hence, a kind of geographical division was the only way out, says a family member. Following the death of their father in April 2011, the family set about demarcating the empire. Besides Ponty and Hardeep, a third surviving brother, Rajinder Chadha, alias Raju, was the claimant. Father figure As the eldest in the family, Ponty had seen tough times. He and his father sold snacks outside a liquor vend in Moradabad. Hardeep, the youngest of the three brothers, was in his early teens when the family literally struck gold. Ponty pulled his siblings up the ladder of success. “He was like a father figure to his brothers and his word mattered,” says a family friend of the Chadhas. Kulwant Singh wanted the family to stay together and his sons complied with his wish and lived in South Delhi’s posh Chattarpur farms area. Ponty, helped by his 31-year-old son Monty’s acumen in real estate, was clearly the richer of the three brothers and the one synonymous with the group. Apart from the flourishing liquor trade, Ponty’s company, Wave Infratech, created ripples in the real estate world last year by bidding a whopping Rs 6,500 crore for a 152-acre piece of land in the heart of Noida. Hardeep was the owner of Chadha papers, a Bombay Stock Exchange (BSE) listed company. He also owned AB Sugars at Dasuya, Punjab, and AB Grains Spirits at Gurdaspur. In his companies, the other brothers were directors, but the operational post of executive director was with Hardeep. The two brothers reportedly developed differences over the sale of the family sugar mill (owned by their father) in Uttar Pradesh. The fact that Monty had been made “in charge” of Wave Infratech was possibly another trigger point. Monty is the modern face of the group that is conducting meetings with global companies and investors to invest about Rs 10,000 crore till 2016 in its Noida project. The faultlines Since the Chadhas were among the richest Sikh families in the country, the empire was being divided carefully to avoid bad blood. Just days before the killings, the brothers had reportedly met lawyers, saying they wanted to divide the empire on mutual terms rather than sully the family name. The faultlines, if any, had been carefully papered over. Harvinder Singh Sarna, Hardeep’s father-in-law, says: “There was no dispute. The brothers had their own businesses”. On November 22, the bhog ceremony of the two brothers was conducted jointly at Delhi’s Rakabganj Gurdawara. Portraits of the duo were placed less than 2 feet apart, symbolising the family sentiment that they will stick together. |
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Business interests, assets
Wave Inc was the pioneer of luxury multiplexes in North India. The first multiplex was inaugurated in Lucknow in 2003. Now, it has 28 screens in New Delhi, Noida, Kaushambi, Lucknow, Ludhiana, Moradabad and Hardwar. Film distribution is handled through Ginni Arts. Real estate Manufacturing Paper: In 1992, the group ventured into paper manufacturing at Bilaspur, now in Uttarakhand. It produces kraft and newsprint. Bottling
plants: Part of the nine franchises of Coca Cola India Ltd, the group’s plants in Amritsar produce popular brands of soft drinks. |
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Entertainment
Valued at around
Rs 10,000 crore, Wave Infratech has built Centrestage Mall and Silver Tower in NoidaWave City, Wave One and Wave Estate, mostly in UP. Residential projects include 4,500-acre Wave City (Noida), Wave Estate (Mohali) and Wave Lakewoods (Hyderabad). Townships in tier II and III cities like Amritsar, Jaipur, Bareilly and Meerut are in the pipeline. 
Distilleries: The distillery at Dhanaura in UP aims at a capacity of 80 KL/PD and 80 MW of generation while AB Sugars Limited at Dasuya in Punjab has a capacity of 60 KL/PD and an integrated power plant of 5.5 MW. The Hoshiarpur sugar plant produces IMFL for retail in Punjab, UP, Delhi, Andhra Pradesh and Kerala. The Gurdaspur-based AB Grains Pvt Ltd operates a grain-based distillery. A ~300-crore expansion plan for the site includes the manufacture of own brand of alcohol.
Sugar: After the acquisition of the Dhanaura sugar mill in UP in 1997 during the tenure of Kalyan Singh, the group entered sugar manufacturing. It produces 8,300 TCD and had a turnover of ~175.38 crore in 2006-07. The second crushing unit at Dasuya has a capacity of 7,500 TCD and generates 33 MW of power, of which 25 MW is exported. 
Food: His company Great Value Food bagged a ~9,000-crore contract from the UP Government to procure food for malnourished children under the ICDS scheme. This was in violation of a Supreme Court order that only self-help groups, mahila mandals and village communities should be given such contracts.