In Delhi, in a particular set, being the object of an Enforcement Directorate investigation is almost a rite of passage. But it is unusual to be the target of investigation by the ED, the CBI and the Income-Tax department.
Ratul Puri, former World Economic Forum Young Global Leader for 2008, has that unhappy distinction. Once a regular at the World Economic Forum, Davos, and now better known as Madhya Pradesh Chief Minister Kamal Nath’s nephew (his mother is the veteran Congressman’s sister), there was a time when Puri was a much sought-after name.
Educated at Delhi’s Modern School and then Carnegie Mellon in Pittsburgh, Pennsylvania, the second-generation entrepreneur was invited to media conclaves organised by major groups. Ernst & Young declared him Entrepreneur of the Year in 2002 for his contribution towards manufacturing industry in India, and World Brand Congress as well as Asian Power Awards named him CEO of the year in 2014 and 2015.
His father, Deepak Puri, who founded the Moser Baer group, and he were the poster boys of Made in India success. In 2003, India Today lavished praise on senior Puri, noting that Moser Baer “is the world’s third largest manufacturer of optical and magnetic data storage discs and clients include 11 of the top 12 global technology brands”.
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Cinderella who overstayed welcome
That was then. But these are the days of ‘Unmake’ in India. Now, the Central Bureau of Investigation (CBI) has registered an FIR against Ratul Puri, 47, and others for cheating and defrauding the Central Bank of India to the tune of about Rs 354 crore for which he is currently in the custody of the Enforcement Directorate (ED). The bank fraud amount has been re-estimated at Rs 1,492 crore, according to ED, and is much higher than what the Central Bank of India mentioned in its complaint.
He is also under the ED scanner for a case relating to alleged irregularities in the purchase of 12 VVIP choppers from Italy-based Finmeccanica’s British subsidiary, AgustaWestland; the deal was cancelled by the government in 2014 on charges of corruption.
His properties (as well as those of Kamal Nath’s aides Praveen Kakkar and Rajendra Kumar Miglani) were also part of the IT raids conducted in April on at least 50 locations in Bhopal, Indore, Delhi and Goa.
You could call him the male Cinderella, who overstayed his welcome at the ball, and whose entire empire turned into a gigantic pumpkin, with no princessly deliverance in sight. You could also call his the most obvious fall of Lutyens’ Delhi, with the IT department provisionally attaching his home at 27A APJ Abdul Kalam Road (previously Aurangzeb Road) under section 24(3) of the Prohibition of Benami Property Transactions Act, 1988.
Also read: Kamal Nath calls nephew Ratul Puri’s arrest ‘action with malicious intention’
Familiar modus operandi
Business journalist and bestselling writer Tamal Bandyopadhyay calls Ratul Puri’s story an unfortunate Indian classic. “It looks like the same old story that some of the Indian corporate chiefs – both promoters and professionals – have been scripting for long: fund diversion and money laundering,” he told ThePrint.
The modus operandi is familiar, he says. “It’s over-invoicing (in case of Moser Baer where Ratul Puri was the executive director till 2012 but reportedly the key decision-maker in running the company). A forensic audit found that the company had been taking loan from banks for long and restructuring the account – probably the classic ‘evergreening’ where you take fresh loans to keep old loans ‘performing’ or ‘standard’. I can’t vouch for this, though. There is also money laundering allegation related to the AgustaWestland VVIP chopper case,” he says.
There is also the issue of corporate governance, the bane of several high-flying corporate czars before Ratul Puri. You reach a stage, adds Bandyopadhyay, where you “feel that you can get away with anything but you get caught”. It is also a story of technological obsolescence, with the death of the compact disc market, and an enormous bet on an emerging industry, renewable energy, not taking off as expected.
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No stranger to failures
And yet, those who have worked with Ratul Puri swear by his acumen. Media consultant Balaji Krishnaswami says he is very focused, giving complete attention to the other person irrespective of level or designation. “He would put in a minimum of 10-11 hours a day in the office, encouraged the next level to take ownership, and avoided publicity. He was one of the first Indian entrepreneurs to get into solar energy,” he says. Generation worked well, manufacturing business didn’t. “He knew the entire chain of the solar plant commissioning,” he adds.
But Puri is no stranger to failure. When his father’s CD business started failing, he took a big bet on manufacturing solar panels in 2005. As an article in Forbes said in 2014: “Over the next three years, MBIL (Moser Baer India Limited) would invest over Rs 3,000 crore – a considerable amount given that the company’s revenues were Rs 1,343 crore in 2005 – in setting up facilities to manufacture crystalline silicon and thin-film panels and buying the required technology.”
However, the Forbes report said, “a combination of factors, including the financial crisis of 2008 and oversupply of panels due to aggressive Chinese production, saw Puri’s bet falling off the cliff. In the nine months ending December 31 2013, MBIL had incurred a loss of Rs 695 crore”. MBIL was the 200th corporate debtor to be liquidated under the Insolvency and Bankruptcy Code, 2016. It was declared defunct on 20 September 2018 by National Companies Law Tribunal.
But Ratul Puri reinvented himself with a new company, Hindustan Powerprojects Private Limited in 2008, and invested heavily in solar energy. His company website says “the group currently has a portfolio of 6,000 MW in projects under various stages, amounting to an asset size of $2 billion, and employs more than 800 associates across sites”.
Independent journalist Paranjoy Guha Thakurta believes that if you do a forensic audit of big business houses “including individuals perceived to be close to the current establishment, you will find similar business practices. My gut feeling is that he has been targeted because his mother is Kamal Nath’s sister. This, however, is not the same thing as saying that he is entirely above board”.
In 2008, Ratul Puri was one of the 17 Indians in a list of 245 young leaders chosen from around the world by World Economic Forum. “We need the Young Global Leaders to be a voice for the future in the global thought process and as a catalyst for initiatives in the global public interest,” WEF said.
The same year, India Today had quoted him saying: “Scale excites me, I don’t believe in niches”.
Well, he has certainly got more excitement than he bargained for.
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The author is a senior journalist. Views are personal.
Strange article. Instead of focussing on the crime, it seeks mitigation circumstances for Shri Puri. These awards that seem to have impressed the author a lot, do not amount to much. Satyam had once got an award for corporate governance.
Ratul Puri is another example of how Indian star entrepreneurs gone bankrupt were made with mindless bank loans turned NPAs now. These star performers were also star performers in engaging illegal activities thinking their political links will save them. With Modi now leading the government, all these star performers have now turned out to be criminal in reality.
He id a thief, he is not paying his employees any appraisal and pla from past 4 straight years and showing in books that company not doing well. His whole organization employees are joke just sitting stupidly. He has opened his companies to launder money. This is just a paid article.. Every word in it.. All the higher people in his company already left. He should be behind bars and his company should be sold to Adani or in some other good hands