BS READS: Baba in jail, business gone for a toss - the curious case of Ram Rahim

Revenues of his movie business have dropped to zero, while his FMCG business, which was touted as a rival to Patanjali, is on the brink of extinction

Till August 2017, when Dera Sacha Sauda chief Guru Ram Rahim was a free man, he was everything to the world but chairman of a sprawling business empire. A spiritual guru with millions of followers. Social reformer vowing to change the world in 134 ways. Actor, producer, stuntman, editor, director and music composer. Motorcycle connoisseur. Miracle maker. Redeemer of his followers’ sins. Ruler of a sprawling 700-acre kingdom in Haryana’s Sirsa where his word was the rule of law. A vote magnet for every political party he would choose to turn his benevolence on.

Then on August 25, 2017, Ram Rahim was sentenced to 20 years in prison after being convicted by a Central Bureau of Investigation (CBI) court of rape. The godman appealed his sentence in the high court in 2017 but little has yet come of it yet. There are cases of his having allegedly castrated some his followers which are in different stages of trial. His followers still unflinchingly back him. The Dera Sacha Sauda has lost its divine messenger (he is called messenger of god or MSG); and with that the cult’s myriad businesses have gone into free fall.

Investigators including those from the Enforcement Directorate (ED) are still trying to determine the extent of Ram Rahim’s business empire and land holdings. Since most are not in the godman’s name and have been acquired in the names of his followers, the task before the ED is mind-bogglingly complex. Business Standard found at least 30 companies associated with the godman and his followers claiming to be involved in chemicals, retail, wholesale, agricultural products, automobile manufacture, fast moving consumer goods (FMCG), apparel manufacturing, software development, media production, advertisement, management consulting, animal husbandry, immigration consultancy, movie production and a lot more (See Graphic). Five of the most visible of his businesses with a paid of capital of more than Rs 10 crore revealed that they are headed into oblivion. The drastic fall in revenues could see many of these businesses going bust in a few years in the absence of the godman who was the face of it all.

Nothing exemplifies this better than one of the organisation’s most visible business – movie making. Its flagship production house, Hakikat Entertainment, made various movies featuring Ram Rahim. Between 2015 and 2017, the production house clocked Rs 150 crore in revenues, most of it coming from the ardent followers of the Dera Sacha Sauda who flocked the few theatres it was released to prop up its box office earnings. According to regulatory filings, in 2018-19, revenues plummeted to zero. This wasn’t surprising since all movies produced by Hakikat Entertainment centred around the godman. One of them had him claiming a world record for the most movie credits ever in the world – 43 in all. Two of them titled MSG and MSG: The Messenger premiered between a few months of each other in 2015. As the title suggests, they were about the godman; written, edited and co-directed by him. The third of the MSG series which features Ram Rahim as an alien hunter and titled MSG: The Warrior Lion Heart premiered in 2016. In 2017, a few months before he was sent to prison the Warrior Lion Heart series was back with another movie in which the godman is seen defending India against Pakistan based terrorists. After the incarceration of the godman and his proclaimed daughter – who also featured alongside him in some of the movies – no new project has been taken up by Hakikat Entertainment.

Business Standard tried to get in touch with Chhinder Pal Arora, the producer of the godman’s movies and a director in some of his companies. Arora said that “he wasn’t connected” to the movie business anymore and was doing his own production work. He refrained from commenting any further. Hakikat Entertainment, like most of the businesses linked to the godman, has multiple shareholders. All of them are followers of the cult and mostly based in the districts of Sirsa in Haryana and Bathinda in neighbouring Punjab. One of the biggest shareholders holding 10 per cent of Hakikat Entertainment’s equity is an enterprise controlled by the cult’s followers named ARZ Unique Enterprises.

While its market or business presence remains rather vague with a registered office in East Delhi’s Shahadara, it claims to be involved in the manufacture of textiles. From 2014 to 2017, it earned Rs 25 crore in revenues. After Ram Rahim’s arrest, its earnings fell to just about Rs seven lakh in 2018-19. A similar story encapsulates the fate of some other companies with a fairly large capital base, such as MSG Electric System and Multiple Cap Stock Trading. Revenues have dipped more than three times in the same period.  

Perhaps the most intriguing aspect of this decline seems to unfolding in one his trademark corporations launched in 2015. Named MSG All Trading International, it had ambitious plans to launch multiple FMCG products under the brand name ‘MSG’ across India by establishing brick and mortar stores, online shops and through teleshopping. The full launch happened exactly a year later in March 2016, when MSG in a grand show, announced the launch of 151 products to a crowd of his raucous followers. Touted as organic and meeting international standards, they included everything from rice, pulses, salt, tea, cooking oil, biscuits to cosmetics and ayurvedic products. Many in the media touted the arrival of ‘MSG’ brand backed by the godman as a rival to the fast growing Patanjali, whose brand master was another popular ‘saffron’ figure, a yoga guru named Baba Ramdev.

Within the first full year of the launch of its products, the company clocked almost Rs 250 crore in revenues – remarkable for any first time FMCG manufacturer. As Ram Rahim’s films increasingly brought him to national attention from his self-administered empire in the obscure town of Sirsa, curiosity for MSG-branded products rose. In fact, the company reportedly claimed in 2016 that it had received requests for its products from places like Canada and European nations. But the dream to emerge as a rival to Ramdev’s Patanjali was snuffed out within a year of its stupendous success. Following Ram Rahim's arrest in August 2017, MSG products have literally disappeared off the shelves. Its online store is in disarray. While the cult’s ardent followers continue to swear by the intermittently available products, brand ‘MSG’ has virtually been decimated. In 2018-19, its revenues had crashed to Rs 11 crore – a 20-fold decline from its launch levels a couple of years ago. Operating expenses had dwindled in similar proportion – indicating a massive scaling down of operations, disappearing stores and vanishing manufacturers of MSG branded products.

“Sales of MSG products have gone down drastically. Initially (after Ram Rahim was jailed), businesses completely closed. They slowly restarted. Supplies from manufacturers have dried up now. They are barely sufficient to meet the demand of Dera followers,” said Charan Singh Rathi, a Dera follower who was formerly associated with one of the companies linked to the cult.

Specific questions sent to Dera Sacha Sauda, Hakikat Entertainment and MSG All Trading went unanswered till the time of publication.

Anurag Tripathi, an author who wrote a book after a decade-long investigation into the cult’s activities, said, “Ram Rahim never wanted to build a business. The difference between Patanjali and MSG is that Ramdev, despite his showman tendencies, came with a genuine business idea. Meanwhile people who were failed by the system approached Ram Rahim. He played on their insecurities and used his political connections to help them and project himself as divine to these people. They invested their money in his Dera which were then channelled into these companies. How can such businesses last?”