LIQUOR KING CHEERS R REGIME CHANGE
Hit by tax raids, a lokayukta probe and Mayawati’s departure, Uttar Pradesh’s sugar baron is making new friends and starting new businesses
It’s early morning, April 19. Gurdeep ‘Ponty’ Chadha, 52, has just returned to Delhi on a chartered flight from a 6 a.m. appointment with Uttar Pradesh Chief Minister Akhilesh Yadav in Lucknow. Dressed in an Armani suit, he sits in the living room of his 10-acre farmhouse in Chattarpur, displaying a touch of fidgetiness. Ponty is firefighting on several fronts. He faces an ongoing probe by the Uttar Pradesh lokayukta for the manner in which he acquired four sugar mills in 2009 as part of the then Mayawati-led Bahujan Samaj Party ( BSP) government’s disinvestment process. On February 11, there were multiple income tax raids on his offices across Uttar Pradesh. In March, Mayawati, his patron-in-chief, was ousted as the Samajwadi Party ( SP) swept the Assembly elections.
But the man who controls nearly 80 per cent of Uttar Pradesh’s liquor business, estimated at Rs 14,000 crore in 2011 as per Uttar Pradesh Industrial Development Corporation figures, is a survivor. As exotic cockatoos and macaws chirp in a wire enclosure, he outlines the next move for his Rs 10,000-crore, 24-year-old Wave Group. The liquor baron has made peace with the ruling SP. He was present at the swearing-in ceremony of Akhilesh Yadav on March 15, a fact that surprised many who thought he was finished with BSP’S ouster. “A change in the political landscape never impacts business,” says Ponty.
New roles have been defined for everyone, including himself. Operating from his farmhouse, the best way to avoid public glare, Ponty will drive the Wave Group’s liquor business strategy while brother Rajinder will shuttle between Ludhiana and Aligarh, home to the group’s breweries, and micro manage operations. The rest will be managed by son Manpreet ‘Monty’ Chadha.
Monty’s academic record is not inspiring—he dropped out in Class IX from Welham Boys’ School, Dehradun—but his business acumen could be another story. The 30-year-old has hurriedly announced two mega real estate projects in Noida and Ghaziabad that will cost Rs 4,000 crore. He has already created a stir among other builders by offering homes for as little as Rs 19 lakh in Noida. Monty has also finalised a Rs 350-crore foray into India’s Rs 30,000 crore poultry market with a four-acre plant in Noida. Poultry plants in India process 2,000-3,000 chickens an hour on an average. Monty will import Dutch cutters capable of processing 6,000 chickens in an hour. Machines imported from Israel will also help him to keep hens under controlled climatic conditions instead of open or semi-closed enclosures as is the current practice. His moderately-priced broilers—to hit stores later this year—may trigger India’s first-ever chicken war.
If this happens, Ponty will no longer be seen merely as Uttar Pradesh’s liquor king. “It’s the most challenging phase of my life,” he says haltingly, reading from his copy of the Guru Granth Sahib after every question. From now on, the liquor business, the family’s “backbone”, will grow but take a backseat. “No one in the family wants to handle liquor except me, not even my son.” He wants to reposition himself as a backroom strategist, a backstreet mover and shaker.
Ponty has worked out his new Uttar Pradesh agenda, coordinating with other industrialists to resurrect the now defunct Uttar Pradesh Development Council ( UPDC), once headed by former SP leader Amar Singh and packed with his close friends such as Anil Ambani, Adi Godrej, Subrata Roy and Amitabh Bachchan. Topping the revived UPDC’S agenda would be resolving the state’s
THE LOKAYUKTA PROBE AGAINST PONTY COULD GIVE THE NEW GOVERNMENTA POTENTWEAPON TO TARGET MAYAWATI.
perennial power crisis. The blueprint, that has broad consensus among the state’s major industrial players, has impressed Yadav so much that he has agreed to discuss the issue soon with the state electricity regulatory commission.
Ponty also wants to double the capacity of Wave mall-cum-multiplexes that he operates across Uttar Pradesh, Punjab and Delhi, to emphasise that his growth is not linked to any party.
Liquor helped the Wave group attain its near invincible status across Uttar Pradesh. The business, now monopolised by Ponty since March 2009, started way back in 1952 after his father, Kulwant Singh Chadha, obtained a country liquor licence in Moradabad. In 2008, the BSP government created a special excise zone comprising Bareilly, Moradabad, Meerut, Saharanpur and Agra and Ponty was given exclusive rights to run vends for both country liquor and Indianmade foreign liquor. Thanks to proxies and associates, Ponty ended up controlling the liquor business in all 72 districts of the state through more than 450 vends. Older players such as Jawahar Jaiswal, who once dominated the Purvanchal region of Uttar Pradesh, Mahesh Narain, Subhash Kumar and D.P. Yadav virtually went out of business. Ponty added a markup on the maximum retail price. The practice continued till the February IT raids. The special excise zone con- tract runs till March 31, 2013.
Ponty’s liquor business grew in Punjab, Rajasthan, Delhi, Uttar Pradesh, Uttarakhand and Chhattisgarh; but alongside, so did other branches—real estate, hydel power, cinema halls, softdrink bottling and education. Monty is confident that the new game plan will help his father acquire an improved image and transform the group into a conglomerate with interests in sectors stretching from real estate to sugar to education to poultry. Helping Monty in the makeover is Barbara Delinc, a Czech marketer poached from global real estate firm Jones Lang Lasalle, who will help the Wave Group acquire a new logo and a style statement.
The I-T probe worries Ponty, even though investigators didn’t find any cash. A senior Central Board of Direct Taxes official lost his job as Ponty protested about the political nature of the raids. But the raids have made him wiser. He has instructed his men to make future payments in cheques.
Since March 2011, the state lokayukta has been investigating into the way Mayawati conducted the disinvestment process of sugar mills run by the state-owned Uttar Pradesh State Sugar Corporation Limited in 2009. Four sugar mills were offered to Ponty for Rs 206 crore. Their actual worth, according to the Comptroller and Auditor General’s calculations in March 2011, was more than Rs 2,000 crore. Ponty, who already has a sugar mill at Dhanaura in Moradabad district, immensely benefited from the acquisitions, as molasses, a byproduct of crushed sugarcane, is a key ingredient for country liquor.
The probe by Uttar Pradesh Lokayukta Justice (retd) N.K. Mehrotra could become a potent weapon for the SP government in a state where the previous government is already at the receiving end for rampant corruption in the National Rural Health Mission, currently being probed by CBI.
But handling politicians as well as corporate rivals is a game he has played well for a long time. At his daughter Harsheen’s February 15 wedding to Harmit Walia, a Dubai-based naval engineer who is now into the luxury yacht business, politicians in attendance included Punjab Deputy Chief Minister Sukhbir Singh Badal, former Punjab chief minister Amarinder Singh, former Haryana chief minister Om Prakash Chautala, SP’S Ram Gopal Yadav, BSP former MP Akbar Ahmad and Delhi minister Arvinder Singh Lovely. Politicians may be in and out of power but businessmen go on forever.
WITH SON, MONTY