Ponty Chadha, raided this week by tax authorities and who is UP Inc's most colourful and controversial member, is a study in how power, politics and profit work when mixed liberally with alcohol commerce.
How much space does it take to stack up currency worth Rs 100 crore? Or was it Rs 125 crore? How were I-T officials, who raided businessman Gurdeep Singh Chadha's premises in Noida and elsewhere last week, able to tell the Press with such accuracy the amount of currency they allegedly found, within hours of going in? Or was it all a political manoeuvre ahead of Uttar Pradesh elections?
Where is Gurdeep aka Ponty Chadha? Dubai or Mumbai? When is his daughter's wedding scheduled to take place? February 8 or 9? Where is it now going to be held? Wait, he has a daughter?
Evidently, there are more questions surrounding Ponty Chadha than answers. But there is really only one question that needs an answer. How does a man control the alcohol trade in two large states, build up a diversified conglomerate with interests in sugar, paper, power, alcohol, real estate development, entertainment and others with an annual turnover of well over Rs 6,000 crore, all the while keeping a tight leash on what is known about him to the world?
Inconsistencies in the stories about him are such that in UP, where he is almost a cultural construct, when two people who claim to have observed him for long, talks about him, they could well be talking about two different people. Did his father start a small business in Moradabad in UP, or in Uttarakhand?
Did Ponty Chadha lose one hand in a car accident, or both? (An ET reporter who has met Chadha is able to confirm that he suffers from disability in both hands as a result of suffering from electric shock while flying kites as a child). Is he close to Mayawati, or Mulayam Singh Yadav, or just anybody in power?
It is this phantom-like quality -even senior excise and sugar industry officials who deal with Chadha's businesses routinely, say they have never seen him personally - combined with a paucity of information about him, whispers about political connections and a ruthless streak, that places his trajectory among the more interesting growth stories that coincided with Mayawati's chief ministership in UP.
A quick perusal of filings by Chadha's companies - the Wave Inc group - with the registrar of companies doesn't help shed much light either. He operates through a large number of companies that frequently changes names and merges with one another, making like-to-like comparisons of balance sheets over the years impossible.
There is also little management discussion of business activities even in the reporting of flagship companies such as Wave Industries, Wave Infratech and Wave Distilleries and Breweries.
Chadha's family has been in business since the time his father migrated at the time of partition to Moradabad from Pakistan. But Ponty grew it to a scale where it now controls the lion's share of alcohol trade in much of north India. In a rare interview to ET in 2009, Chadha said his Group's revenue from the liquor trade was Rs 4,000 crore and the total was Rs 6,000 crore.
An informed guess would suggest that the group's turnover is now several thousand crores more. It was just ahead of the 2009 general elections that as a result of a change in UP government policy, the Chadha group became the sole wholesale agent of alcohol in UP, a state with high demand for alcohol of all kinds.
It's a variation of the model that political scientists call the baptist-bootlegger coalition. The UP government decided to abolish the system of multiple wholesale dealers to control the trafficking of spurious alcohol from neighbouring states. The solution was to have just one seller of alcohol. The company that was picked happened to be Chadha's.
The alcohol trade is closely connected to power and politics. It's a high-stakes business that requires deft management of your allies, rivals and rules. And Chadha is reputedly the trade's master craftsman.
The relationship he builds with governments - be it the Amarinder Singh government in Punjab in 2002-07, UP's 2003-07 Mulayam Singh Yadav administration or the former Ramesh Pokhriyal government in Uttarakhand - are leveraged to the group's advantage in other politically sensitive sectors such as land, infrastructure and power.
The controversy over Chadha's companies being allocated a number of hydro power projects in Uttarakhand was partially responsible for Pokhriyal's eventual ouster as CM.
Chadha could not be reached and his associates as well as his son Manpreet Chadha did not respond to requests for an interview. In his 2009 interview to ET, he dismissed suggestions that he mixed politics with business. When asked about whispers of his proximity to the Mayawati government, he then said: "We have normal relations. We work in several other states as well and keep normal relations with the government authorities there".
Wave Infratech denied in a statement that unaccounted money has been found in raids. "There is no income which remains undisclosed to the government authorities," it said in a statement, adding that it had no connections with any political parties or persons.
UP has a long history of business houses that rise concurrently with political dispensations. The I-T raids on Chadha's companies on the eve of polls in UP will only serve to deepen the perception that the group's stunning rise is tinged with political flavours.
Additional reporting by Man Mohan Rai
