Balbir Singh Uppal, the promoter of three LOIL firms that owed Rs 757 crore to National Spot Exchange Ltd (NSEL), told investors and brokers in Mumbai he didn’t owe anything to the exchange. Adding that in fact the exchange had to repay him the margin money or deliver commodities.
According to NSEL statements, LOIL Overseas Foods Ltd owed Rs 93 crore, LOIL Health Foods Ltd owed Rs 298 crore and LOIL Continental Foods Ltd owed Rs 366 crore, against several tonnes of paddy stocks.
“Uppal was dismissive of investors’ claims and behaved in a rough manner. Though the exchange officials were waiting to meet and discuss, Uppal refused to meet them and kept them waiting,” said an NSEL investor present at the meeting. “We were trying to convince him to pay his dues. But he was of the opinion that he didn’t owe anything to the exchange. Also, he doesn’t have any rice stock and it was the exchange that was supposed to deliver the commodity.”
The Punjab strongman, known for his political links, is said to have claimed the backing of about 16,000 farmers in Punjab and Haryana. Investors said he had clarified he would not meet anyone other than Jignesh Shah, promoter of NSEL’s parent Financial Technologies. Uppal, a media-shy person, came to the limelight in 2007, when he donated 15 kg of gold puja items (worth Rs 1.5 crore, according to 2007 prices) to Tirumala-Tirupati Devasthanam, the country’s richest temple complex.
Uppal, 64, hails from Chabhal, a small village in Punjab’s Tarn Taran district. He started his career as a stakeholder in a rice mill in Tarn Taran. Subsequently, he shifted to Khamanon village, Fatehgarh Sahib district, and set up a rice mill there; now, it is the sub-continent’s largest rice processing mill. Sources said the expansion was triggered by Uppal’s strong leadership and good contacts in political circles, both in the ruling Shiromani Akali Dal-Bharatiya Janata Party coalition and in the Congress.
It is said Uppal was behind the development of Khamanon, the location of his processing unit in Fatehgarh Sahib. After the company was set up there, the village developed into a small town and the company became the prime source of employment for the youth there. Currently, about 2,000 people are said to be employed at his factory.
A person familiar with Uppal and his businesses said, “In 2000, he was facing problems from the nearby truck union. He called all the drivers working with the union and listened to their problems. Taking into consideration all the aspects, he suggested the drivers take advances from him and buy trucks. The truck drivers were moved by his generosity; they accepted the offer and aligned their trucks to his company. Thus, he put an end to the transportation problem and broke the truckers’ union.”
Close aides described him as a very social person, one who often attended functions in other villages. In 2009, Union Minister for New and Renewable Energy Farooq Abdullah and Punjab Chief Minister Parkash Singh Badal laid the foundation stone of a 60-Mw biomass-based energy power plant in the premises of his factory Lakshmi Energy and Foods Ltd. The first phase of the plant, with a capacity of 30 Mw biomass (husk) based-power, started commercial production about a year and a half ago.