Dodgers owner Mark Walter's India bet ends in disaster: Here's what happened

Mark Walter recently he’s turned his attention to sports, acquiring major stakes in the Los Angeles Dodgers, the Los Angeles Lakers and Chelsea Football Club

Mark Walter has a reputation as one of Wall Street’s savviest operators. The son of a factory worker from Cedar Rapids, Iowa, he parlayed a meeting with a descendant of the Guggenheim mining and art-gallery dynasty into Guggenheim Partners LLC, a financial services giant with $320 billion under management. Much of the firm’s success—and Walter’s estimated $6 billion wealth—derives from buying sleepy regional insurance companies, putting the premiums into higher-risk, higher-return investments and keeping a big chunk of the profits. More recently he’s turned his attention to sports, acquiring major stakes in the Los Angeles Dodgers, the Los Angeles Lakers and Chelsea Football Club, using his gift for financial engineering to pull off league-upending deals. When baseball star Shohei Ohtani was introduced in Los Angeles in December as the highest-paid athlete ever, it was Walter, 64, he shared the stage with.

Mark Walter estimated $6 billion wealth—derives from buying sleepy regional insurance companies, putting the premiums into higher-risk, higher-return investments and keeping a big chunk of the profits.

Two months later, in an austere building off a highway in the Indian city of Gurugram, police opened an investigation into another investment involving Walter—one that had received zero publicity and been altogether less successful. Between 2011 and this month, Infrastructure India Plc (IIP) had received $320 million from companies owned by or connected to Walter and Guggenheim Partners, primarily to build a logistics powerhouse that would shuttle everything from steel girders to iPhones around the subcontinent’s railways.

Instead, a Bloomberg Businessweek investigation based on hundreds of documents and dozens of interviews has found that IIP squandered the money on ill-fated land deals, tens of millions in management fees and a series of transactions involving obscure entities owned by the directors of IIP’s largest subsidiary. The company is now on the verge of collapse, and Indian police have been looking into a whistleblower complaint, seen by Businessweek, alleging that one of Walter’s former partners in the venture, Rahul “Sonny” Lulla, fraudulently siphoned off millions of dollars. Lulla denies any wrongdoing and says the whistleblower is a disgruntled ex-employee who’s failed to provide any evidence of the alleged crimes.

Walter, who is media-shy at the best of times, declined to be interviewed for this article. His lawyer, Dan Webb, a former US attorney for Chicago, said in a series of emails that his client has had nothing to do with the running of IIP or its Cayman Islands holding company, GGIC Ltd., since 2013. “Neither Guggenheim Partners nor any of its executives, affiliates or related parties manages, controls or influences IIP’s board or IIP’s business activities in any way,” Webb wrote.

Yet Guggenheim retains a stake in GGIC, and Walter was one of three principal directors at the company for a decade until 2018, according to a filing he made with the Connecticut state insurance commission. Records also show that between 2019 and May of this year, an offshore entity owned in part by Walter, called IIP Bridge Facility LLC, lent IIP $121.5 million—even after red flags had appeared, including one auditor’s refusal to sign off on the books. Today, $110 million of that debt is sitting in the portfolios of insurers owned by Walter and his associates, exposing them to likely losses. Webb said no individual policyholders have been or will be affected by events at IIP.