How Badals’ businesses grew by leaps and bounds with political power
Although not directly related to each other, the death of a 13-year-old girl – after she was molested and thrown out of a bus run by Orbit Aviation, Punjab deputy CM Sukhbir Singh Badal’s company – has triggered a host of questions on the Badals’ business empire.india Updated: May 11, 2015 08:58 IST
Although not directly related to each other, the death of a 13-year-old girl – after she was molested and thrown out of a bus run by Orbit Aviation, Punjab deputy CM Sukhbir Singh Badal’s company – has triggered a host of questions on the Badals’ business empire.
Since the Shiromani Akali Dal, led by the Badals, came back to power in 2007, the empire grew very fast with its footprints in the hospitality, road transport, civil aviation and media industries.
But according to the 52-year-old president of the SAD, business is no longer a dirty word for political families. “All my business dealings are above board. Former CM Captain Amarinder Singh tried his best to put me behind bars by unleashing the vigilance on me. He could not prove anything wrong," Sukhbir said.
In 2002, Singh sent the state vigilance department after Sukhbir’s father, Punjab CM Parkash Singh Badal, to unearth his family’s disproportionate assets. The department estimated the market value of the family’s assets at Rs 4,326 crore.
But seven years later, the charges fell flat as witnesses turned hostile and investigating officers refused to cooperate even after facing perjury proceedings.
The Badals’ business efforts can be traced back to 1989, when then Haryana CM Devi Lal allotted 17 acres of prime land to Sukhbir’s Orbit Resorts. The deal remained entangled in legal battles till 2000. The CAG pegged the losses to the Haryana exchequer at Rs 600 crore in 2002. The case, however, finally went in Sukhbir's favour.
This was probably the reason why the SAD defied ally BJP by going with Devi Lal’s son, Om Prakash Chautala, and his Indian National Lok Dal in the Haryana assembly polls last year.
Now, the huge empire is run by the extended Badal family, including Sukhbir’s wife Union minister Harsimrat’s brother and state revenue minister Bikram Singh Majithia, and food and civil supplies minister Adaish Partap Singh Kairon, son-in-law of Badal senior. The family now holds more than 25 portfolios in the state.
Sukhbir's business empire alone adds up to more than Rs 875 crore. In 2013-14, the annual turnover of Orbit Resorts – which owns a five-star and a three-star hotel in Gurgaon – stood at Rs 245 crore.
According to the Union corporate affairs ministry, the net worth, including the revaluation account, of Orbit Resorts was Rs 746 crore as on March 31, 2014. Sukhbir and his companies have an 88% stake in the company in 2013-14.
Sukhbir said the net worth of Orbit Resorts was high because of the revaluation of assets (land in Gurgaon). "As for the revenue, the hotel is run by the Oberoi group and it is doing very well."
Also, Sukhbir and Harsimrat floated yet another hospitality company, Metro Eco Green Resorts, in 2007 for building a luxury hotel near New Chandigarh.
But it’s the transport sector that mints money for the family. Orbit Resorts has three subsidiaries in the aviation and media industries (see box). All three were floated after the Badals came to power in 2007.
Harsimrat’s father, Satyajit Majithia, and brother, Gurmeher Majithia, were the first directors of Orbit Aviation, part of the transport empire incorporated in June 2007 after merging Orbit Transport into it. Now, the majority stake in Orbit Aviation is held by Orbit Resorts and G-Next Media.
Orbit now owns a fleet of over 60 luxury buses, an eight-seater Cessna 525A jet, an eight-seater Super King Air B200 and a Bell 429 helicopter. Plus, together with Dabwali, the Badals own over 230 buses in Punjab.
What’s more, Sukhbir’s transport companies also have stakes in companies owned by their close associates, Lakhvir Singh and Jagpal Singh.
The Badals’ business practices, however, have come under severe criticism. For, while the family has been booking profits, the state transport corporation has losses piling up.
Orbit Aviation’s annual revenue in 2013-14 was Rs 62 crore while the total revenue and profit after tax of Dabwali were Rs 51.5 crore and Rs 10.5 crore, respectively, in 2012-13. In 2007, Dabwali's profit after tax was a mere Rs 1.17 crore.
Compare it with the Rs 365-crore accumulated losses of state-owned Pepsu Road Transport Corporation. The CAG’s 2014 report also said PUNBUS, a government company that operates Punjab Roadways, had been running on loans.
Interestingly, Sukhbir attributes the PSU losses to high salaries and retirement benefits offered to drivers. "My companies made profit as we don't pay drivers such salaries or retirement benefits."
However, Sukhvir’s success formula included devising a fare structure that clearly worked to the advantage of the luxury segment dominated by the Badals. Transport secretary Anurag Aggarwal defended the move: "It was done to encourage the upper middle and middle classes to use public transport instead of cars.”
Sukhbir seconds: "The policy was made in public interest. One bus takes away the traffic load of 13 cars. Governments across the country and the world are encouraging public transport."
Badal's buses also enjoy preferential treatment in terms of prime routes and timings. Former transport minister Master Mohan Lal of the BJP flagged the issue of preferential time allotted to the Badal buses. The Orbit and Dabwali buses are rarely booked for rash driving or flouting permit rules.
More, the Badals' PTC channel manages to score high viewership by buying the exclusive rights to Gurbani from the Badal-controlled Shiromani Gurudwara Prabandhak Committee. Till last year, PTC News also had the exclusive rights to cover the proceedings of the assembly, which was withdrawn during the budget session in March, following protests by the Congress.
But Sukhbir still takes pride in his business practices. “Which kind of politicians is better – the ones like the Gandhis who hide their businesses or those like me who do business, get their companies audited and pay taxes?”
After Moga case, Badal family in the eye of storm brewing in Punjab
First Published: May 08, 2015 15:51 IST