Sunday, November 18, 2012

Ponty Chadha's vast business empire mired in uncertainty

A day after liquor and real estate baron Ponty Chadha and brother Hardeep died in a shootout at a Delhi farmhouse, uncertainty hangs over his massive business empire estimated to be worth several thousand crores. 

From its humble beginnings, Mr Chadha's Wave Inc has diversified into real estate, paper mills, sugar mills and bottling plants, mostly in Uttar Pradesh and Punjab, and has a turnover of over Rs.2,500 crore. 

Mr Chadha's father Kulwant Singh Chadha started off in the early 1960s by setting up a liquor shop at Ramnagar in Uttarakhand. Next came a sugar-crusher in Uttar Pradesh. What happened next is hazy at best but over the years, especially in the last 15 years, Mr Chadha went on to become a liquor and real estate magnate. 

The Wave Inc website puts the company's turnover at Rs. 2500 crore, but other estimates of Mr Chadha's wealth are far grander. His thriving real estate business, mostly in Uttar Pradesh, is valued at around Rs. 10,000 crore. He was the lone wholesaler for liquor in Uttar Pradesh - a Rs. 14,000-crore business as per 2011 figures. 

Another Chadha company has the sole contract for supplying midday meals under the child development scheme in Uttar Pradesh. Going by these estimates, Mr Chadha's total worth could very well be over Rs. 25,000 crore.

Mr Chadha's meteoric rise is thought to be linked to his enormous political clout. He is believed to be close to Bahujan Samaj Party chief Mayawati, Samajwadi Party chief Mulayam Singh Yadav as well as the Badal family and Congress in Punjab.

Mr Chadha's businesses were a family affair, run with the help of his son Manpreet and brothers Hardeep and Rajinder. With two brothers gone, the group is now left in the hands of Manpreet and Rajinder.

Manpreet is reported to be already handling the real estate business. It's the liquor business that may now be at stake. Mr Chadha ran it with an iron fist, after being made the lone liquor wholesaler for Uttar Pradesh by the Mayawati government in 2009. 

Whoever takes charge will have to contend with many controversies. Only last week, NDTV had reported how Mr Chadha was accused by a Supreme Court food commissioner of gaining a business advantage in Uttar Pradesh to supply food for midday meals. 

A recent CAG report criticised the Mayawati government for selling five state-owned sugar mills to Mr Chadha at a loss of Rs. 1,200 crore to the exchequer. 

On September 25, the Supreme Court had issued a notice to the Uttar Pradesh government on a petition challenging the allotment of land to Mr Chadha's realty project in Noida. The petition was filed by 94 farmers whose land was acquired by the state government.

For years, not many questioned Mr Chadha's business tactics, until the income tax raid at his premises across the country in February this year. There was speculation that a part of his wealth was hidden in the basement of his mall in Noida. 

When income tax officials drew a blank, there were allegations that Mr Chadha had been tipped off about the raids. Questions about his troubled legacy may now come back to haunt his family.