PUNE/ MUMBAI, JUNE 9: In the leafy
neighbourhood of Deccan Gymkhana, Pune’s very own Malabar Hill,
Gadgils are old money.
On the main road, Nandan Gadgil and his wife
lived in a rambling mansion. A couple of hundred metres away, was his
multistoreyed office. He promised the world an asset base of Rs 5,000
crore. In Pune, phones rang for the whole day when Gadgils sponsored
the Buick Golf Classic seven years ago. Today, the ICICI name is
emblazoned on the reflective blue glass of the office building. The
couple—winners of Wills Made for Each Other contest—with their two
young sons (ages 22 and 18-19) are on the run. Some say, they are in
Brazil.
There is no sign of the Rs 5,000 crore
conglomerate. Just a lot of bad debts, investors who have torn and
thrown their papers away and an 80-year-old father, Prabhakar Gadgil,
who attends close to a 100 court cases on behalf of his son.
Nandan Gadgil’s whirlwind plans ran a
company and a good name that was set up in 1928 to the ground. His
family—brother, parents, uncles—says they have not been in touch.
They are all prepared to meet and talk about the ‘‘the dead
fish’’—the Western India Group.
Uncle Avinash Wardekar (70) lives nearby in
one of the lanes. Somebody in the house likes the latest silver cars.
There are four spotless beauties, all different models, in the
driveway.
The retired industrialist sits behind sliding
silk panels, with a haunting portrait of his wife on the wall. Nandan
was his sister’s son. ‘‘He was into too many projects in too
little a time. He would raise pre-project expenses from the public,
and put it into a completely different project.’’
In 1982, Gadgil started with Western India
Industries that provided turnkey consultancy and project engineering.
Five years later, he floated Western Paques for pollution engineering.
Then came forays in sugar, petroleum, ship-breaking and repairing,
financial services, estates, energy and even condoms.
Former power minister Suresh Prabhu was a
director of his group companies, Western India Financial Services
Limited. His companies went over the country’s borders to places
like Dubai, Bahrain and Singapore. In June 1994, Western India
Industries came out with an issue to raise another Rs 142 crore.
Nandan Gadgil floated nearly a dozen
companies. In the mid-nineties, all of them collapsed.
Nandan, says his uncle, had the gift of the
gab and was amazing at convincing people and financial institutions.
‘‘He was in Delhi. Over there, they know how to make people
gullible. He did not want to be in Pune, he wanted to be in
Delhi.’’ He had the external affairs ministry agog with plans to
do business with Liberia. ‘‘His brother Chandan, an engineer from
Goa, was the brains,’’ says the uncle.
Chandan did conceptualise Western Paques, an
environmental business that combined non-conventional energy with
biotechnology. It did turnkey projects and made money out of waste.
Western Paques’ IPO was launched on September 10, 1990. The amount
raised was Rs 3.5 crore. It came out with yet another issue in
September 1993 to raise Rs 67 crore.
‘‘But I opted out in 1991-’92. Nandan
wanted to operate from the Middle-East and I wanted to be here. You
can’t operate from remote places even if you hire staff that is
professional enough,’’ says Chandan Gadgil.
The Gadgil name was an open sesame for banks.
A former chairman of Janata Sahakari Bank, H M Mirasdar, explains how
easy it was. Nandan Gadgil and his cousin Avinash Wardekar’s son
took Rs 27 crore on bill discounting, a common practice by companies.
Though Wardekar’s bit is returning in instalments, the Gadgil
capital is unlikely to return.
‘‘The bank’s managing director Dilip
Tengshe gave the amount without any security, without informing
anybody. He was booked for fraud and his services were
terminated,’’ says Mirasdar.
From Vasant Vihar in Delhi, Nandan Gadgil had
shifted base to Dubai. His uncle Avinash Wardekar describes how the
end came: ‘‘Somebody from the US offered him a useless refinery
for $20 million. He could manage just $10 million and lost that.
That’s where he lost everything.’’
He was arrested for a weekend in Dubai. The
Enforcement Directorate asked the BSE and NSE to clamp down after
after detecting violation of FERA and RBI norms.
There is only one company still
alive—Western India Shipyard, based in Goa. An ICICI official, who
refuses to be named, explains how: ‘‘It had got into a huge
problem, primarily because of the sponsors. The promoting company got
into a huge litigation. It was a classic case of financial
indiscipline and incompetent management. Now, all lenders have
appointed their nominees and in the last two years the company has
turned a corner. Their loans have been restructured and it is listed
on the BSE.’’
Chandan Gadgil, who runs a small software
company, insists that his brother did not run away with the money.
‘‘Mismanagement. Too many things. Remote control. He made a lot of
mistakes but the intention was not create money and go,’’ he
defends his brother.
So why did Nandan run? ‘‘There are too
many issues that he can’t clear.’’ The promising son has left
the court cases for his elderly father to deal with.
