Amitabh Bachchan – from bankruptcy to crorepati

In the year 2000, when the entire world was celebrating the new century, I was celebrating my disastrous fortune. There were no films, no money, no company, a million legal cases against and the tax authorities had put notice of recovery on my home,” Amitabh Bachchan.(Ref)
Amitabh Bachchan, BIG B, needs no introduction,  his charisma is unrivaled. He first gained popularity in the early 1970s as the Angry young man of Hindi cinema or Bollywood, and has since become one of the most prominent figures in the history of Indian cinema. He is the most-nominated performer in any major acting category at Filmfare, with 36 nominations overall. In addition to acting, Bachchan has worked as a playback singer, film producer and television presenter, and was an elected member of the Indian Parliament from 1984 to 1987. In 1999, in a BBC Online Poll, Amitabh Bachchan was named the Superstar of the Millennium ahead of the likes of Alec Guinness and Marlon Brando. In June, 2000 he became the first living Asian to have a wax statue erected in his honour at Madame Tussaud’s.
Amitabh
But has his life been a bed of roses? He has had health issues-in 1982 accident on sets of Coolie,  in November 2005, he underwent surgery. In 2000 , at the age of 57(when common man is thinking of retirement), he had Financial crisis when he almost lost all that he had. Financial crisis doesn’t discriminate among people in any income bracket or line of work and can affect any of us at any time in our lives. This article is all about how he landed into the crisis and how like his reel life he emerged a hero, fighting all odds.And what can we learn from him.

Amitabh Bachchan Corporation Ltd(ABCL)

In 1995 Amitabh started Amitabh Bachchan Corporation Ltd(ABCL) that specialized in film production and event management. It was a pioneering attempt to evolve a corporatised entertainment company on the lines of the Hollywood studios. The company burst into the limelight in 1996 when it brought to India the Miss World Pageant.But in its tearing hurry to grow and expand, it seemed to have spread itself too thin without proper planning and management control.

ABCL – what did it do? What was it all about? Anything and everything to do with the entertainment business – for eg:- Make films, once you make films you distribute them, you sell the music of the film, you manage the actor who act in the films, and you have an event management group that could leverage on the actor’s brand equity as well. Then in related areas you get into television production, as also in the lucrative area of selling commercial time on television.

In keeping with the vision the group moved fast, recruited 150 people, launched 15 films with cost per film ranging from Rs 3 to 8 crores, got distribution rights for Bombay and Bandit Queen – both of which were successful at the box office – got into music with Aby Baby, Diljale, Rakshak, Tere Mere Sapne etc, and ofcourse on the event side the Miss World Pageant & and the BPL Dandia.

Miss World Pagent

Miss World 1996, the 46th Miss World pageant took place on November 23, 1996 in the city of Bangalore, India. 88 contestants from all over the world took part in the prestigious pageant. By the end of the night, Irene Skliva of Greece took home the title.

1996_world_logo

ABCL’s attempts at event management threw up more fits than profits. The Miss World contest, its first such attempt, was riddled with controversies, beginning with protests from women’s groups and ending with the Spastics Society publicly denouncing the company’s inability topay up its promised charity until recently. The Miss World international organisation expected a fee of $2 million from the local event manager. Along with other costs, ABCL would have run up a bill of an estimated $5 million (Rs 17.5 crore). Even a modest estimate puts ABCL’s loss at about Rs 4 crore.

Ref:

Interview of Amitabh with Vir Sanghvi on Rediff in 1996 (Ref)

interview_1

interview in 1996

The first year the company did achieve its target turnover of Rs 65 crore and made a profit of 15 crores. But that growth was not substantiated in the second year.Trouble started between Bachchan and their professional managers when Amitabh agreed to do stage shows in North America. The professional managers became upset that the booking were not done through ABCL. The impasse finally resulted in change of top team.  Out CEO Sanjiv Gupta In Gautam Berry. But the conditions did not improve. Its productions like Mrityudaatha all failed dismally .

abcl

Bankrupcy

In 1999 ABCL was facing an unprecedented liquidity crunch. Substantial funds were blocked in production and distribution of films; staff salaries were not being paid on time; and public confidence has nosedived.

In March 1999, hounded by creditors led by India’s public broadcaster Doordarshan and Canara Bank, ABCL approached the Board of Industrial and Financial Reconstruction to seek protection under the bankruptcy laws.

The Bombay high court restrained Bachchan from selling off his Mumbai bungalow ‘Prateeksha‘ and two flats till the pending loan recovery cases of Canara Bank were dealt with.

Bachchan, however, pleaded that he had mortgaged his bungalow to Sahara India Finance for raising funds for his company. The Indian Board for Industrial and Financial Reconstruction declared Amitabh Bachchan Corporation Limited a ‘sick’ company with a debt of US$14m. Bachchan explained: “Our friends advised us to close this losing venture and move on but we decided to clear all our debts despite huge losses and re-start the production of films“.

prateeksha

Amitabh’s house Prateeksha and his friends who helped him

It is only my conscience that kept me going,” the legendary actor said. “Many businessmen and financial advisers told me that I should give up ABCL and start a new life. But somewhere I felt that I owe people money. People had put faith in ABCL because of my name. Therefore, I could not let it go easily.”

There was a sword hanging on my head all the time. I spent many sleepless nights. One day, I got up early in the morning and went directly to Yash Chopraji and told him that I was bankrupt. I had no films. My house and a small property in New Delhi were attached. Yashji listened coolly and then offered me a role in his film Mohabattein,”

“I then started doing commercials, television and films. And I am happy to say today that I have repaid my entire debt of Rs 90 crore and am starting afresh,” Bachchan said.

Ref:Rediff

bankrupt

His fight back

ABCL was down and out, but AB the star wasn’t. Big B was back with a bang by 2000, this time on the small screen with Kaun Banega Crorepati—a series that revived his fortunes along with those of the STAR Plus. This was at a time when most movie stars saw television as a step back in their career but Bachchan changed that perception. Estimates reveal that Bachchan earned Rs 15 crore for 85 episodes of the show. The rush of endorsements that came his way, like the ICICI Bank endorsement deal for Rs 10 crore, helped Big B pay back creditors and clean up ABCL’s balance sheet. Helping him in his hour of need were  Subrata Roy of the Sahara group and Samajwadi Party general-secretary Amar Singh. At sixty plus, Amitabh Bachchan became a greater icon.

Kbc
Interview in 2009: Ref

In retrospect, what do you think went wrong with ABCL?

I think perhaps, in many ways, I myself should be the person bearing the blame.

Why do you say that?

I am not a businessman. I never have been. I have problems dealing with money. My entire career has been managed by family members or managers who have looked after my affairs. I am totally ignorant as far as money matters are concerned. For me to suddenly be thrown into this huge corporate ocean without adequate managerial capacity was perhaps the unmaking of the corporation. But I was told that ‘You’re like the brand figure, you don’t have to get into the nitty-gritty of management.’ So, I very diligently kept away from it. What was required was to have an efficient executive team where you have CEOs, VPs etc. Which is what I did. I entrusted them with the job of running the corporation. I am sorry to say, but despite all this talk of professional executives and professionalism in management, this was a terrible example as far as our company was concerned. I trusted them but their feedback, their information was inadequate and false. It led to one disaster after another.

If I was to rewind your life five years back, would you start ABCL again?

Yes. I think it was a very noble cause, a new concept, very remarkable, very unique. The best part is that there are hundreds of others now following this pattern. I don’t know whether it is succeeding or not but at least it has initiated a consciousness among them.

The company was launched again by Amitabh Bachchan in 2001 as A B Corp. The company then went on to produce hit films such as Paa in 2009 Directed by R Bali and Viruddh.

movies

Interview in 2003(Ref:Rediff)

Bachchan was full of praise for Amar Singh and told the audience that when he was in deep trouble Amar Singh was his strength.

I am very fortunate that I have a younger brother like him. He gave his hand to me in that trouble and introduced me to the Managing Worker of Sahara Group Subarta Roy and industrialist Anil Ambani. They joined hands not to put money, but they gave me moral support and strength,” Bachchan told the audience.

Asked if this was his second innings, Bachchan said, You cannot say this is my second innings. I will say that I have got a chance to prove myself again. Hum log chaans bhi phook phook kar piyenge abhi.”
I have learnt to learn from my mistakes. We had gone through bad phase and we accept our failure. Now we want to start fresh,” he said.
Asked about mistakes, he said, “There is no point in going into those details now. This time I will be careful to keep financial accountability. At board level we will have a committee and we will not take any individual decision. We had 200 employees at ABCL earlier and now we have only two people.”
This is a very small step I am taking now. Jo hogaya so hogaya. I am only keeping in my mind that I should not repeat my past mistakes now,” he added.

Assets owned in 2012

In March 2012, according to the affidavit filed by Jaya Bachchan as Samjwadi Party candidate for Rajya Sabha, She alone has movable and immovable assets of nearly 100 crore and with Amitabh Bachchan around 500 crore. The break up is given below(Ref:Pioneer:Jaya Bachan worth 100 crore)

Assets Jaya Bachchan Amitabh Bachchan
Bank Accounts HSBC Bank Dubai branch-3.06 crore  Fixed deposit in Bank of India: 92 croreHSBC Bank-USD-New York: 66 lakhs
Bonds, shares, debenture and mutual funds  4.3 crore  69 crore
 Loans given  20 crore  91 crore
 Cars Toyota Lexus: 30 lakhToyota Qualis: 8 lakh Rolls Royce worth Rs 3.08 crore, two Mercedes worth Rs 2.2 crore, one Poarsche Cayman worth Rs 62 lakh besides vehicle likes Toyota Innova, mahindraScorpio Toyota Qualis mahindra Bolero and a tractor.
 Gold, Silver Gold worth -32 lakh, jewellery – 12.48 crore,Silver articles -35.3 lakhsilver bars -18.9 lakh  Gold worth Rs Rs 2.03 crore, jewellery worth Rs 20.49 crore and silver articles worth Rs 3.7 crore.
Paintings   Rs 19 lakh  3.8 crore
Watches  - 1.7 crore
Agricultural Land  Bhopal and Lucknow worth Rs 5 crore  Lucknow and Barabanki district worth of Rs 3 crore.
Non-Agricultural Land  plot in sector 44 in Noida at Film city worth Rs 60 lakh In Ahmedabad worth Rs Rs 15 lakh and other at Juhu Mumbai worth Rs 25 crore.
Commercial building  -  In Juhu worth Rs 20 crore
Residential building in Bhopal worth Rs 51 lakhJalsa at Mehta Road in Mumbai worth Rs 40 crore At Juhu worth Rs 20 crore, another at Juhu worth Rs 20 crore, one at Gurgaon worth Rs 1.2 crore, an apartment at Juhu worth Rs 1.75 crore and one in France worth Rs 3 crore.

Conclusion

He lost all the wealth that he had built because, like many others, he was good at earning and creating wealth, but trusted others and did not have the ability to protect the wealth he had earned. But, like many of his reel roles, in real life, too, he fought and is now a bigger role model across generations.

We focus all our time and energies on building wealth and how we are going to become wealthy. However, we do not place enough emphasis on the protection of what wealth we have, or on protecting our earning ability along the way.

YOU NEED TO BECOME RESPONSIBLE FOR YOUR MONEY LIFE. YOU NEED TO PROTECT YOUR HARD EARNED WEALTH. Remember, as long as you have something, there is always a risk of losing it—so be prepared and protect your wealth, because not all of us are Big B. “Aaj mere paas buildingey hai, gaadi hai, bank balance hai. Tumhare paas kya hai. Kyaa hai tumhare paas…”  We should not end up saying “Mere paas Sirf Ma hai..

Ref:Outlook money

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Has Amitabh Bachachan proved himself to be a real hero? What are your thoughts on his struggle from bankruptcy to crorepati.

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