Ponty Chadha: The man who would be king19 min read . Updated: 01 Dec 2012, 07:09 PM IST
Chadha, his brother’s killing brought to prominence a business family about which very little was known
Chadha, his brother’s killing brought to prominence a business family about which very little was known
New Delhi: A day after liquor tycoon Gurdeep “Ponty" Chadha and his younger brother Hardeep died in a hail of bullets at their family farmhouse in Chattarpur, south Delhi, friends and relatives gathered for the funeral at a cremation ground in the Capital. They had to wait for a long time on that Sunday, 18 November. The arrival of the bodies was twice delayed for the postmortems to be completed.
The corpses of the two brothers who, it had been surmised by the police, had shot each other with assistance from their henchmen, were laid on the same bier and the same priest chanted the prayers, according to a friend of the family, who did not want to be named.
“Anywhere else, there would have been daggers," he said. “But it was one of the most graceful funerals I’ve seen in my lifetime. Not a single person was whispering anything negative."
Chadha, 52, and his brother, 10 years younger, were feuding over possession of the farmhouse, inherited from their late father, according to the police account. Delhi police detectives and forensic scientists are still investigating the crime scene, weapons and bullets. They have taken several men into custody, including Sukhdev Singh Namdhari, the former chief of Uttarakhand’s minorities commission, who has lost his job.
Namdhari was present at the crime scene when the shoot-out took place and, it is now claimed by the police, fired the shots that killed Hardeep.
There has been no definitive account of what exactly transpired at the family farmhouse on the morning of 17 November, but conspiracy theories abound, given Ponty Chadha’s larger-than-life image and presence in businesses ranging from liquor distribution and real estate to films and his behind-the-scenes involvement with politics and politicians, especially in Uttar Pradesh, Uttarakhand and Punjab.
Whatever the truth, the shoot-out brought to national prominence a business family about which very little was known even in northern India, their home turf. Ponty Chadha did not revel in the kind of fame enjoyed by other magnates in the alcohol industry—men such as Vijay Mallya of the UB Group, for example.
The man who controlled more than half the liquor market in Uttar Pradesh, India’s most populous state, was a private person, according to his friends, keeping the business within the tight confines of the family and suspicious of outsiders.
This is the portrait that emerges of Ponty Chadha: he was a paunchy, broad-chested, grizzle-faced man; a warm-hearted person who greeted his friends with bear hugs. He was a giver of extravagant gifts, a family man who didn’t smoke or drink excessively, who wasn’t obsessed by flashy parties or page-three folks, and mainly dealt in cash.
Chadha was an arbiter of disputes, an egoist with a car “like an armoury", a fearsome rival, a protective father, and a man who feared for his life.
But most importantly perhaps, Chadha was a shrewd and manipulative businessman, who ruthlessly outmanoeuvred his competitors and had a vision that could have extended the family trade indefinitely.
Today, the family’s Model Wine Shops are everywhere in Uttar Pradesh, but the Sikh refugees from Pakistan, headed by Chadha’s father Kulwant Singh, started their trade selling snacks from a stall.
After partition, Kulwant Singh, the eldest of six brothers, and his sons settled in Pirumadara village near Ramnagar in Uttarakhand. Two former business associates of Singh, who wanted to remain anonymous, remember the family moving to the town of Moradabad sometime between 1957 and 1960.
“They were very poor," said Ishtiqar Ahmed, a former business partner of Chadha’s youngest uncle, Narender “Sweety" Singh, who still lives in Moradabad, in the spacious white mansion built by the family when times
got better. “His father sold pakoras on a makeshift stall outside a liquor shop in Moradabad. As a kid, Ponty did too."
Kulwant Singh opened his first liquor shop in the Amroha Gate area of Moradabad, according to the two former business associates, who were themselves prominent figures in the district’s liquor trade, but would ultimately lose out to Ponty Chadha.
They remembered other rivals, including a man known only as Totla, who was a big trader and businessman before the Chadhas arrived. “Suddenly, around 1970, Totla vanished. He has never been traced since," said one of them.
Initially, the family partnered with several other businesses, but within a short span of time had eradicated most of the competition, the two associates said. “At first, Kulwant and his brother Harbhajan Singh were the face of the business and, until very recently, most people associated the family with Kulwant," they said.
Liquor was not the only business into which the family ventured. According to a local doctor, who wanted to remain unidentified, the family also ran a sugar cane crusher unit in Gajraula in the late 1970s and early 1980s, which was later converted into a rubber unit that closed in 2009.
During Indira Gandhi’s emergency rule (1975-1977), the family moved into the sugar trade.
“The family went on to establish (sugar) cane factories near Gajraula. They were into all sorts of businesses," said Ahmed. “Ponty owns a paper mill in Bilaspur. They also have an export business in Moradabad. They own a sugar factory in Mandi Dhanara near Gajraula."
When Ponty Chadha, Kulwant Singh’s eldest son, entered the business around 1980, he made an immediate impression, the two former business associates said. “Ponty was well-mannered and had a helping nature. People are indebted to him in many ways," one of them said.
Others have a less-positive recall. “He was a shaitan (devil) since he was a child," said Ahmed. “As a kid, he lost one hand, as it was electrocuted while he was flying a kite and it got entangled in a wire. His hands were badly burnt and one of them had to be amputated."
Some claim the injury was the result of a gun fight, said the family friend cited earlier. “There were two stories," he said, “and frankly, no one had the courage to ask him about it."
Despite the injury, Ahmed said, Chadha was an adept driver, though in later years he would travel in a convoys of Land Cruiser SUVs, imitating “the Arab style", said the friend.
“He was a lord," said a local hotelier, who owns a few small businesses in Gajraula, and whose father was a close business associate of Kulwant Singh between 1984 and 1989. “Ponty was a terror," he said. “He was the single-mind force behind the business and was instrumental in its growth."
Chadha’s family had a tradition of going into business early, it appears. “Ponty’s rise began in the mid 1980s," said the hotelier, who didn’t want to be identified. “Monty (Manpreet— Ponty’s son) began dabbling in business even while he was at school."
As a manager and boss, Chadha wins handsome praise. “His company is very professionally run," said a senior executive at a New Delhi-based commercial real estate development company. “Everything was done in a very transparent way," the person said on condition of anonymity. “All we know of him was he was very good with getting work done and was a go-getter." The executive’s company has worked with Chadha’s Wave Infrastructure in various capacities.
“One good thing about Ponty was that there was not a single person who will say that ‘He owes me money’ or ‘He’s a bad paymaster’," said the family friend. “If he got to know that someone had not been paid by his people, he’d fire the employee and pay the guy double. It was about reputation."
The hotelier agreed. “He was generous, but did not tolerate cheating. If he found (that) someone had bungled, he would remove him immediately."
The combination of an iron fist and velvet glove served Chadha well. “Ponty is a shrewd chap, his employees are faithful to him," said one of the two former business associates cited earlier. “Over time, he created a syndicate in the region and subsumed all liquor traders within his business. We ourselves buy liquor for our bar from his company—we have no choice. His dealings with us have been by and large ethical. I recently met him by chance at the Delhi airport, and the moment he saw me, he hugged me warmly."
The groundwork for the familial franchise that Chadha set up was laid early on. “Ponty began a system of subcontracting called ‘peti-system’ locally, in which the liquor shop was given out to a close confidant to manage and he would take a cut," said the hotelier. “But he would still only trust people from his extended family to sit on the counter and register inventory, etc."
That bias stayed with Chadha to the end. “He’d always involve his family in his business—nephews and nieces would get jobs," said the family friend. “It’s typical godfather style. Somebody comes to him, and he’s bought his loyalty forever with a loaf of bread or a job."
But the obsession with loyalty worked both ways, said the friend. Ponty’s justice was as sure as his protection. “If you are on his right side and he has his hand on your head, you can commit any crime and come back to him," he said, speaking in the present tense of the man who is no more. “But no one could cross him; not even his own blood could get away with it."
Building his monopoly involved a series of deft political manoeuvres by Chadha. In the early 1990s, he became close to then chief minister Mulayam Singh Yadav and began gradually to extend his reach throughout the state.
“When Mayawati came to power (in 1995), everyone thought he would go down," said Ajoy Bose, a journalist and expert on politics in Uttar Pradesh. “His skill, however, was his political neutrality. His modus operandi was different: he would not even meet Mayawati directly. He was not a groupie of the Mayawati government."
Yadav did not respond to phone calls and text messages from Mint. A spokesperson for Mayawati offered no comment.
During Mayawati’s first two terms (June-October 1995; March-September 1997), Chadha grew his business until he was the undisputed king of the Uttar Pradesh liquor trade—and much more besides. A top Bharatiya Janata Party (BJP) politician, who did not want to be named, said that by 2000, Ponty had the ear of the chief minister, and that “the entire state bureaucracy was under his control".
From 2000-01, under the government of the BJP’s Rajnath Singh, that began to change: S.P. Gaur, a former Indian Administrative Service (IAS) officer and then excise secretary, devised a new liquor policy that would hurt the Chadha empire.
“Before, an auction system was in vogue, in which liquor shops for entire districts were auctioned out," said Gaur. “The auction amount for Lucknow was about ₹ 100 crore and that for Kanpur was ₹ 105-110 crore," Gaur said. Various Chadha family members controlled different areas of the state with “geographical monopolies", he added.
“In such a policy environment, no one else was able to stand up to Ponty and his family," said Gaur. “They began controlling policy formation as well. In fact, the government gradually started depending on them." Excise was the second largest chunk of government revenue after state taxes, so the power the liquor barons held was significant.
When Rajnath Singh’s government moved from an auction system to a licence fee structure, in which every shop had a fixed licence fee and the shops were awarded via a lottery instead of auction, things began to change.
“After we put the new system in place," Gaur said, “the maximum income was generated from the liquor that was being issued directly from the brewery. Moreover, liquor produced in Uttar Pradesh came to be sold only in the state and not outside. The lottery system meant that Ponty’s monopoly ended."
By that time though, Chadha had imprinted his personality on the trade.
In some areas, according to a Lucknow-based businessman who did not want to be named, when liquor is sold at rates above the printed price, the extra margin is known as the “Ponty tax".
While business was becoming tougher in Uttar Pradesh, Chadha’s empire was expanding further afield. According to Manpreet Badal, a former member of the legislative assembly from Punjab, a close relationship with Amrinder Singh, who became chief minister of the state in 2002, gave Chadha a passage into Punjab.
“Ponty was brought into Punjab by the then (Akali Dal) excise minister in the state, Adesh Pratap Singh Kairon," Badal said. “He wanted to remove the monopoly of the Garcha brothers, who were the biggest name in the liquor trade in Punjab. By 2001-02, Amrinder Singh came to power and Ponty became close to him."
J.S. Garcha, a former member of the legislative assembly from the Shiromani Akali Dal, from Ludhiana, one of the eldest members of the Garcha family, agreed with Badal. “Amrinder Singh really brought Ponty into the liquor business beginning with Amritsar," Garcha said.
Before Chadha arrived on the scene, Garcha said, his own family had business worth ₹ 90 crore in Ludhiana alone. “The total annual excise collection in Punjab from liquor was to the tune of ₹ 1,400-1,500 crore when Ponty came into the state," Garcha said. “Amrinder ensured that Ponty won the contracts for entire districts and got a monopoly. Ponty would sell at a huge premium."
Amrinder Singh acknowleged that he and Chadha had been “good friends"—the latter once lent him his house in Dubai for a few days, he said, but denied having brought him into the state with the intention of awarding him liquor licences. “There was no monopoly." Singh insisted. “Several people controlled zones in the liquor trade in Punjab."
Amrinder Singh added that the process of handing out contracts had been recorded on camera and “everything was done in a transparent manner. After I finished my term, we became very friendly, I used to go to their house on social occasions very often. I knew both Ponty and Hardeep".
In a repeat of what had happened in Uttar Pradesh, the Akali Dal government in 2007 changed the liquor policy in Punjab to the lottery system, said Garcha, and Chadha’s dominance began to wane.
“Privately, he was a decent chap; he had no personal rivalries," Garcha added. “But he was very shrewd when it came to money."
Though Chadha would later wrest back control of the liquor market in Uttar Pradesh, he continued to spread his business interests. The creation of the Wave Group of companies was an important part of the transition from the liquor trade to the identity of a conglomerate, which, apart from the liquor and sugar businesses, has diversified interests across real estate, education, paper, malls and multiplexes, and film distribution.
The Chadha group also held a ₹ 5,000 crore contract to supply mid-day meals in Uttar Pradesh under the Integrated Child Development Services and the Rajiv Gandhi Scheme for Empowerment of Adolescent Girls, the news site firstpost.com reported on 20 November. NDTV, in a report on 18 November, estimated Chadha’s total worth at ₹ 20,000 crore.
Prominent group companies include Wave Industries Pvt. Ltd (which had net current assets worth ₹ 402 crore as of March 2011, according to filings with the Registrar of Companies) Wave Infratech Pvt. Ltd ( ₹ 302 crore), AB Sugars Ltd ( ₹ 164.7 crore), True Value Foods Pvt. Ltd ( ₹ 17.7 crore) and Uppal-Chadha Hi-Tech Developers Pvt. Ltd ( ₹ 411 crore).
The details of Wave’s genesis are a little hazy. Its website harks back to the Moradabad days, claiming the group was established “by S. Kulwant Singh Chadha" back in 1963. “The business has been developed over time through strategic investments in services and technologies," the company website says.
But the creation of the Wave brand came much later. According to information available with the corporate affairs ministry, one of the earliest group companies to be incorporated was Chadha Sugars Pvt. Ltd, in 1997. It was later renamed Wave Industries in 2008. Another group company, AB Sugars, was also incorporated in 1997. Other group companies including Wave Infratech and Wave Beverages were incorporated between 2004 and 2008.
On 21 November, citing the same filings, Business Standard newspaper reported that in February 2012, Hardeep had vacated the office of director in Wave Industries, for being absent from successive board meetings.
In 2007, Wave Infratech was awarded 152 acres of real estate in sectors 32 and 25A of Noida for its Wave City Centre project. Manpreet “Monty" Chadha, now the joint managing director of the Wave Group, compared the commercial-residential hub to “Manhattan, New York" in a television interview.
Manpreet was not involved in the liquor business, according to the family friend. Chadha wanted his heir to focus on bringing “professionals into the business—MBAs, foreign architects, trying to give it a corporate feel. He kept his son away from the shady things. He knew the end was not going to be good".
Manpreet Chadha, 32, declined to speak to Mint for this story.
The new brand didn’t offer immunity from uncomfortable questions, however. Earlier this year, a report by the Comptroller and Auditor General of India (CAG) questioned the divestment of 21 state government-owned sugar mills by the Mayawati government between 2007 and 2011. These mills were owned by Uttar Pradesh State Sugar Corp. Ltd (UPSSCL) and Uttar Pradesh Rajya Chini Evam Ganna Vikash Nigam Ltd (UPRCGVNL).
The CAG accused the government of having rigged the tendering process in favour of several private bidders including Wave Industries. It also found that Wave Industries and another competitor for the mills, PBS Foods Pvt. Ltd, had common directors, and documentation containing the same addresses. The CAG said the state exchequer had suffered a ₹ 1,179 crore loss.
But the favours he handed out and his connections still kept Chadha popular with the people he needed to impress. “For Diwali, he’d buy thousands of watches...Rolex, Omega... and give them out," said the family friend. “Everyone would be wearing the same model. They’d see the watch and everyone would know. You may not wear an earring or a belt all the time, but you wear a watch every day, especially if you are a politician. He had a humongous cash flow. You’d say, ‘What a nice phone!’ and he’d say, ‘Take it’, or the next day there’d be one in a box sent to you. But then he wasn’t comfortable in suits really. Nothing flashy."
When the income-tax department raided several of Chadha’s businesses in February this year, the media expected to see evidence of the vast stores of black money that he had allegedly amassed. However, although the tax officials initially claimed to have found cash to the tune of ₹ 100 crore, it subsequently appeared that no money at all had been found, prompting suspicions that the company had been tipped off and scrubbed its properties clean.
S.S. Rana, the official who headed the raid and was transferred afterwards, declined to speak to Mint for this story.
Ponty and Hardeep Chadha were increasingly in the spotlight after the raid, however, and their dispute over the inherited property became more heated. “It was all about ego," said the friend, referring to Chadha’s anger at a court ruling that awarded No. 42, DLF Farms, Chattarpur, where the shooting took place, to his brother.
“People would go to Ponty for settling disputes, out of fear or just because of his overawing persona. Then how did the court give the property to his brother? Who is the court to decide? He’d been dispensing justice for so long that he got this feeling of superiority."
The most pressing issue now is the future of the Chadha business empire after the loss of its patriarch. All Wave multiplexes and malls closed for two days immediately after the shooting, said Amar Sinha, executive director of the Wave Group, as a mark of respect to the late chairman.
Although Sinha said nothing has yet been decided, the likely candidates to take over as the new chairman include the third Chadha brother and managing director of the Wave Group, Rajinder Chadha, who has maintained a relatively low profile over the years, and Manpreet Chadha.
After the shooting, Sinha said, Wave released a print advertisement to reassure shareholders who had been shaken by the news of the shooting. Under the banner “We stand strong. We stand committed," the ad (which also ran in Mint) talked about “continuing with the lineage and heritage of excellence", and extolled the experience and ability of both Rajinder and Manpreet. “And the journey continues," it read.
The journey for the liquor industry continues, too. Uttar Pradesh’s wholesale liquor licences are due to be renewed on 31 March 2013, and rivals to the Chadha supremacy may sense an opening. “Now that he is gone, the syndicate will be broken and others with again try entering the liquor trade," said one of the former business associates cited above. Whether they succeed or not will depend on the junior Chadhas’ ability to both extend and move away from the legacy of the man who made their names. For now, nothing has been decided, said Sinha.
“We are still in mourning"
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