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Ami Jain & Abhinaba Das
Mumbai, April 1: Time was when Amitabh Bachchan caught a cold, the nation sneezed, but times change. ABCL, the megastar's brainchild, has come under the glare of Board for Industrial & Financial Reconstruction (BIFR), but there are few sneezes to be heard in the teeming entertainment industry that he once strode like a six feet-plus colossus.
With three years of consecutive losses since the going began in 1995, the company's net worth has been completely wiped out. The media and entertainment corporation, which was spun around the personality of the Big B, has today turned sick and has been referred to the BIFR. The BIFR has registered the case which will be taken up for hearing shortly.
For the year ended September 30, 1998, ABCL piled up accumulated losses of Rs 70.82 crore, going well beyond its net worth of Rs 60.52 crore.
The ABCL board had, at a meeting in February, passed an unanimous resolution stating that "in view of the accumulated losses being in excess of the company's net worth, based onthe audited accounts for the year ending September 30, 1998, the company has prima facie become a sick industrial company within the meaning of section 3(1)(O) of the Sick Industrial Companies (Special Provisions) Act 1985." The board also passed a resolution that the company be referred to the BIFR as "the accumulated losses exceeded the entire net worth."
The Big B is the chairman of the entertainment company, while his wife Jaya Bachchan adorned the board as vice-chairperson.
The company's accumulated losses, include unprovided liabilities worth Rs 2.31 crore. Net worth, on the other hand, comprises paid-up capital of Rs 32.87 crore and free reserves of Rs 27.65 crore.
ABCL, till recently known as Amitabh Bachchan Corporation, was launched four years back with a pioneering idea of branding the peronality of the cinestar for marketing products and services. Uday Kotak saw that Bachchan's dream fructified into corporate reality. But alas the dream turned sour.
Even as ABCL covered the whole gamut ofentertainment business -- production and distribution of films, audio cassettes and video discs, TV production and marketing, media buying, event management and celebrity management -- profits started eluding the company very soon.
Net profit during 1992-93, 1993-94 and 1994-95 which stood at Rs 3 crore, Rs 19 crore and Rs 14.40 crore, was straightway wiped out the following fiscal when ABCL incurred a hefty loss of Rs 36.08 crore. The final blow appears to have been dealt by The Miss World Contest - 1996, which was organised by ABCL. The beauty show, which was marred by political protests, is believed to have hit the compny adversely. The company's misery continued in 1997-98 as it recorded whopping losses of Rs 41.49 crore.
Hopes may have been raised following the the Centre's decision to accord industry-status to film industry which would lead to institutional funding for the industry. But the decision has come in a bit late for the Lal Badshah's own venture, which continues to be in thered.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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