The rise and fall of man behind JW Marriott
It’s been quite an eventful ride for this businessman, who started his innings at a monthly salary of Rs 10,000 in early 90s.punjab Updated: Nov 18, 2017 15:30 IST
A strong entrepreneurial streak coupled with some good investments once catapulted a middle-class salaried employee to heights of affluence. But some bad investments later, today he is struggling to pay off a humongous debt of Rs 250 crore.
Harpal Singh Saggu’s story is one of modest beginnings, and a steady rise to riches. Once called the man with the Midas touch, he could be heading for a big fall if he doesn’t pay the Rs 8-crore ground rent to the Chandigarh municipal corporation for the JW Marriott site in Sector 35.
Harpal’s house in Sector 10 also lies mortgaged.
It’s been quite an eventful ride for this businessman, who started his innings at the vendor development and inward inspection department of Punjab Communication Limited (PCL), Mohali, at a monthly salary of Rs 10,000 in early 90s .
After eight years, he quit the firm to set up his own company called Synergy Group, which now claims to have an annual turnover of around Rs 1,280 crore with 4,000 employees across the country.
A friend says Harpal made the most of his experience at PCL to manufacture support services, including mobile towers, for the telecom sector, which were then on a high. His downfall began when he diversified into the hotel industry, and bought a site at Sector 35 for a whopping Rs 160 crore in 2006. “Not just this, he spent Rs 200 crore on constructing a hotel on the site,” said his friend.
In December 2012, Harpal’s infrastructure company, Synergy Thrislington, built a 10-storeyed ready-to-use building in Mohali in a record 48 hours. Former deputy chief minister of Punjab, Sukhbir Badal, laid the foundation stone of this much-publicised project that had people gathering to watch it being built. The entire building, made up of pre-fabricated blocks, was assembled on the site.
This was also Harpal’s shot at fame. A friend recounts how he approached Shivraj Patil, the then Punjab governor, to get his name recommended for a government award.
Son of a non-commissioned officer in the Indian Air Force, Harpal had a modest beginning. Neighbours, remember him cycling his way to an evening college at Panjab University in the mid-1980s to attend his BSc classes. His days were spent at the Indo-Swiss training centre, where he did an advance diploma in instrument technology before garnering a postgraduate diploma in marketing and sales management from Bharatiya Vidya Bhawan in Sector 27, Chandigarh.
The family, which migrated to Mohali from Agra in Uttar Pradesh, used to stay in a 10-marla house in Phase 4. Later, they shifted to a one-kanal house in the same phase before making the big leap to Sector 10 in Chandigarh.
THE BIG MISTAKE?
It was in 2006 that Harpal’s company, Lok Priya Buildwell, bought the 3-acre hotel site in Sector 35 for ₹160 crore. Then he lavished ₹200 crore on the site to raise a five-star hotel, and entered into a management contract with Marriott international, a luxury hotel chain.
Under the contract, sources say, Harpal’s firm has to incur all the expenditure on running JW Marriott while paying around 10% of the revenue to the luxury chain for using its brand.
Harpal’s close friends say he spent his entire earnings on the site, and even took a loan of ₹250 crore from four banks. But the hotel could not raise the kind of revenue he needed to repay the loan. Harpal made several attempts to sell what was becoming a white elephant, but in vain.
THE ISSUE AT HAND
On November 10, the estate branch of the MC cancelled the allotment of this site to Harpal’s company for not paying the ground rent and tax of ₹8 crore. On Thursday, sub-divisional magistrate Saurabh Mishra issued a show-cause notice to the site owners and occupiers, asking why they should not be evicted. The notice, pasted on a wall of the building, also seeks their appearance before the estate officer on November 21.
The businessman, when contacted, said, “I am a law abiding citizen and will pay them the entire amount.” When asked why he had been defaulting for the past five years, he said, “It’s a long story, I will share it some other day.”
First Published: Nov 18, 2017 09:14 IST