Bihar via Hong Kong

The distance between Bhiwani, Haryana and Patna, Bihar is a long one. Minister of State (independent charge) Company Affairs, Prem Chandra Gupta, made it even longer by stopping at Hong Kong on the way.

Gupta has been among the lesser-noticed ministers in the United Progressive Alliance until he presented the concept paper for the amendment to the Companies Act last week.

To outsiders, he may appear to be just another Rashtriya Janata Dal politician. But here's the surprise: he runs a sizeably large business empire, which has its beginnings in Hong Kong.

On September 9, 1969, on the last day of Hong Kong's liberal visa regime, a 20-year old economics graduate from Hissar University landed in Hong Kong, with less than $100 in his pocket.

A few families from Bhiwani were already in that country and took Gupta under their wing. He joined an export firm as a junior clerk. In 1970, he set up a small trading business exporting watches to African and west Asian countries. He travelled 20 days in a month and picked up Persian and Arabic on the way.

In 1974, the South China Morning Post noted in a profile, the youngest Indian millionaire in Hong Kong. At 23, Gupta had bought a Daimler Mercedes Benz with the money he had earned himself. Gupta's business grew. Leveraging low labour costs and Chinese productivity, he set up an assembly unit in Hong Kong and began marketing to the US. Among his customers was K-Mart.

In the early 1980s, Gupta decided to return to India. He set up a factory for precision engineering products requiring a high level of sophistication. This became a QS-9000 and ISO 14000 company. The main customer was General Motors and a handful of Japanese firms. A clutch of smaller family firms had a customer base of at least a dozen Fortune 500 companies.

One hot morning in 1986, when the opposition was at sixes and sevens after Indira Gandhi's assassination and the Rajiv Gandhi-led Congress's brute majority in the Lok Sabha, Gupta met Mulayam Singh Yadav, Sharad Yadav and Lalu Prasad at the residence of then Haryana stalwart, Devi Lal. Lalu took to dropping in at Gupta's and over a period of time, it became a personal friendship.

Gupta became Lalu's aide de camp, travelling with him through the heat and dust of Bihar. He made some friends and many enemies, especially after the formation of the Samata Party.

When the National Democratic Alliance came to power, some of his adversaries hit out at him. The Bharatiya Janata Party submitted a memorandum to the President of India urging him to intervene and make the Manmohan Singh-led government drop those individuals against whom charges were pending.

Gupta was among these "tainted" ministers because the Enforcement Directorate was enquiring into alleged foreign exchange violations.

According to Gupta, the case against him was registered on the last day of the sunset clause in Foreign Exchange Regulation Act. The government imposed a Rs 10 crore (Rs 100 million) penalty on him for foreign exchange violations.

Gupta says this was done two-and-a-half years after Fera was repealed and on that day, 14,000 notices went out. Others who got similar notices were Vijay Mallya, State Bank of India, Jayalalitha's foster son, Dinakaran and a clutch of multinationals. This imposed a civil liability on him, so bracketing him with "tainted" individuals was wrong.

Earlier, the income tax department raided him. This raid was "forced" upon him, he says, because of his proximity to Lalu. But the department had to drop the case for lack of evidence. Gupta says he has been paying income tax -- in Hong Kong from 1970 -- and in India till March 31, 2003. None of the companies owned by him have got as much as an octroi or sales tax notice, he says.

Gupta says, speaking in perfect, idiomatic English that he is "a very contented person". He doesn't need money. He believes he is where he is because of destiny. Bihar has always got stepmotherly treatment, especially from people whom Bihar has reposed its trust in.

Foremost among them, Gupta says, is former Prime Minister Inder Kumar Gujral. "I gave up my seat in the Rajya Sabha to ensure his election. He did nothing for Bihar," says Gupta bluntly. "Please write that. Prem Gupta is saying so."

He says he has big plans for Bihar, beginning with the improvement of infrastructure. It is his belief that with Bihar it is a case of giving a dog a bad name and hanging him. If Gupta can do even a fraction of what he appears to be capable of, Bihar might have a chance of turning around.