2G scam trips billion-dollar realty mogul Shahid Balwa

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By Amrita Nair-Ghaswalla

Grounded Shahid Balwa (second from left) with CBI sleuths
Grounded Shahid Balwa (second from left) with CBI sleuths
Photo: Deepak Salvi

HE IS a college dropout, but has an estimated net worth of more than $1 billion. The youngest billionaire to feature on the prized Forbes list of India’s 100 richest people, 37-year-old Shahid Usman Balwa, promoter of DB Realty Limited, has been very pushy and ambitious in all his dealings, say people familiar with the man. Balwa was arrested from his house by the CBI in connection with the 2G spectrum scam on 8 February.

“He had humble beginnings, but has risen in stature in a very short time. He understands the business potential of a venture even if it is not remotely connected with his staple, which is the restaurant business. He delves in and brings a touch of gold to his many ventures,” says an official of the DB Realty group, speaking on the condition of anonymity.

It has been no rags-to-riches story, but Balwa has used his business acumen to score over his business rivals, many of whom allegedly maintain that DB Realty has been using ‘political clout’ to acquire land, especially in mofussil areas that most developers would not think fit. Because his shopping list had garages and small industries, which he bought out completely. Balwa was also famous for entering into joint ventures with landowners, another aspect of the real estate business that most developers shy away from. This would ensure that funds were not unnecessarily tied up and that the project had the blessings of the original owners, who were given an equal share of the stake.

When the Balwas first moved to Mumbai from Gujarat some 16 years ago, Shahid was solely responsible for leading the family’s entry into the hospitality business by taking charge of the construction and operation of the five-star deluxe hotel Le Royal Meridien in Mumbai. A project that brought him instant fame, especially when in 2006 the hotel won several international awards, including the Star Diamond Award from the American Academy of Hospitality Sciences.

Though he had teamed up with Vinod Goenka, son of realtor KM Goenka, at the time of the Meridien project, there was a falling out between the partners. The two got together once again during the 1995-97 real estate boom, when Balwa floated the idea of starting a real estate firm.

BALWA WENT to great lengths to bring foreign investors on board. “While Goenka was still unsure about selling out to a foreign party, Balwa was confident that it was the way forward,” says an official familiar with the group. Balwa used the same strategy in his telecom venture.

Since it was an amalgamation of two real estate groups, Balwa also insisted on an image makeover and teamed up with advertising major Ogilvy & Mather. The advertising firm proposed the name Dynamix Balwas Group, highlighting the drive of the duo responsible for bringing their respective properties to the same table.

Incidentally, Vinod Goenka also figures in Forbes Richest Indians list released last year. With $1.18 billion, Goenka is ranked 54, while Balwa is ranked 66 with $1.06 billion.

Following the success of DB Realty, which bloomed into a 2,000 crore real estate behemoth, both the men decided to diversify into telecom and partnered in the telecom venture, Swan Telecom.

For someone who knew nothing about the telecom business, Balwa managed to make a tidy sum by selling a stake to West Asia’s largest telecom services provider, United Arab Emirates- based Emirates Telecommunications Corporation, better known as Etisalat, which was eager to enter the booming Indian market.

Balwa’s rise has been nothing short of meteoric. His business as well as political connections to gain large tracts of land came under the scanner and he was questioned twice last year by the CBI.

Though sources insist that Goenka brought his political connections to the table and was keen to get a Rajya Sabha nomination from Jharkhand with the support of the BJP and the Jharkhand Mukti Morcha, and that he is the more influential person given his political preferences, Balwa has been at the helm of every business decision of the duo, bringing his razor-sharp mind and flexible nature to each deal.

amrita@tehelka.com

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