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The Rediff Business Special/ Ashok Banker

ABCL: Chronology of a downfall

Part I: Big B' dream of showbiz supershop comes unstuck

Part II: What went wrong with ABCL

January 6, 1987: Sopan Leasing Pvt Ltd, a subsidiary of Tansi Investments Pvt Ltd owned by Amitabh, Jaya and Ajitabh Bachchan, is incorporated as Amitabh Bachchan Corporation Limited. The company exists mainly on paper until 1994.

August 11, 1991: Saraswati Audio Visuals Pvt. Ltd, also a subsidiary of Tansi Investments Pvt Ltd, owned by Jaya Bachchan, is incorporated.

October 30, 1993: SAV shows a turnover of Rs 19.2 million on a capital investment of Rs 1 million, with a profit after tax of Rs 500,000.

March 31, 1994: IPCA, the pharmaceutical firm partially co-owned by Ajitabh and Amitabh Bachchan, shows a turnover of Rs 1.42 billion, with a PAT of Rs 104.2 million.

October 30, 1994: SAV projects a turnover of Rs 51 million on a capital investment of Rs 10 million, with a PAT of Rs 28 million.

October 1, 1994: SAV and ABCL are merged into ABCL.

January 1995: ABCL raises equity of estimated Rs 676 million from a consortium headed by Kotak Mahindra Pvt Ltd at a premium of Rs 70 per a Rs 10 share. And projects a turnover of Rs 574 million by March 1996, Rs 1.03 billion by March 1997, Rs 1.79 billion by March 1998, and Rs 20 billion by March 2000. Of the original invstment of Rs 676 million, Rs 150 million are paid to Amitabh and Jaya Bachchan.

1996: ABCL incurs losses of Rs 80 million on Doordarshan television slots, Rs 70 million loss on Miss World pageant, further losses on music division, event management and other divisions. Promised donation to Spastics Society not paid, after much debate, two post-dated cheques of Rs 2 million handed over to the manager of the society. One cheque subsequently bounces. Still photographers and caterers of the event also complain that they were not paid.

March 1996: ABCL borrows a sum of $ 1.75 million from Dallah Albaraka Investment Company Ltd, a company incoproated in the UK. Money is believed to have gone into working capital of ABCL.

April 1997: ABCL offers private placement issue at a premium of Rs 95 for every Rs 10 share. Public sector banks such as Canara Bank and Central Bank of India participate in issue.

April 27, 1997: United Television moves Bombay high court to recover dues amounting to Rs 9.57 million for 11 Hindi films for which ABCL acquired distribution rights from UTV. Court directs ABCL to pay the claims amount plus 18 per cent interest from December 10, 1996 and Rs 40,000 arbitration cost.

July 1997: Mrityudata, AB's first post-ABCL film, is released after being sold to distributors for an astronomical Rs 35 million to Rs 40 million per territory. (More than ten times the average cost for most of the previous year's hit films).

July-August 1997: AB said to be in talks with Ketan Somaiya, Kenya-based NRI, for selling out 51 per cent stake in ABCL. Talks allegedly fail. Fifty employees of ABCL retrenched and given three months notice. Big B music label (Hindi titles) sold to T-Series, Big B (English titles) to BMG Crescendo. Producers of Bhai, Gupt, Yug Purush, Purab Ki Laila Paschim Ka Chaila withdraw music rights from ABCL and resell them to other companies.

Distribution rights of Bade Miya Chhote Miya, earlier with Ethnic Enterprises (owned by Bachchan's secretary Sheetal Jain) sold to Shrinagar films. Remaining company employees complain they are not paid for three months.

November 1997: UTV secures warrant from court to seize ABCL properties due to non-payment of dues and arbitration costs.

January-March 1998: ABCL shifts base to partitioned section of Sahara India office. Amitabh and Jaya tour towns and villages promoting Sahara India's non-banking finance schemes and appear on posters alongwith Shweta and Abhishek. Abhishek Bachchan signs on as lead star in J P Dutta's next film (later titled Refugee).

March 27, 1998: UK court decrees that Bachchans should pay $ 1.6 million to DAICL. A firm named Dolphin Management Services Ltd makes two payments of $ 100,000 and $ 149,980 on behalf of the Bachchans, $ 1.45 million still remains outstanding.

May 1999: Canara Bank moves the Bombay high court, asking to attach Pratiksha in order recover dues. Other debtors also move court. Court stays order pending decision of the BIFR to whom Bachchans have applied, asking that ABCL be rated as a sick company.

June 1999: Sooryavansham flops, further depressing the market for Bachchan's films. Distributors reluctant to touch new AB releases, except those where he appears alongwith another bankable star, like Bade Miya Chotte Miya featuring Govinda.

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