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By the early 1990s, Bollywood superstart Amitabh Bachchan’s career was plateauing. That’s when Bachchan and a team of professionals headed by Sanjiv Gupta set up ABCL. The new company met with early success but its forays into television followed along with an ill-fated association with the Miss World Contest in Bangalore in 1996.
Today it is difficult to imagine that one of the superstars of Bollywood, who’s starred in some of its biggest hits, a man whose face has adorned dozens of campaigns and who just has to show up at an industry do to rake in the moolah, nearly went bankrupt around the turn of this century.
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By the early 1990s, Amitabh Bachchan’s career was plateauing. That’s when Bachchan and a team of professionals headed by Sanjiv Gupta, who had been hired from Hindustan Levers Ltd (HUL), came up with the plan for setting up Amitabh Bachchan Corporation Ltd (ABCL) to get into film production, distribution, event management, talent management and television marketing. The new company was incorporated in 1994 with a high-powered board comprising Amitabh Bachchan, Jaya Bachchan, Ajitabh Bachchan, Surinder Kapoor of Sona Steering and Chakor Doshi of Walchand Industries.
The new company met with early success and in its very first year of operations, it made a profit of Rs 15 crore. This inspired the bright MBAs who were running it to become even more ambitious and reckless. Forays into television followed along with an ill-fated association with the Miss World Contest in Bangalore in 1996.
It was a slippery slope. In dire need of cash to fund this rapid growth, the company turned to banks for loans. The banks were happy to lend against personal guarantees from Bachchan. But by now things had started going awry.
Mrityudata and Major Saab, two films touted to be Bachchan's comeback vehicles, flopped, along with a few more made under the ABCL banner. In desperation, the executive team came up with a wild and unique concept, a music album titled Aby Baby, featuring Bachchan with dancers from abroad in an MTV-style video. The video created a stir but did little to arrest the declining fortunes of the company.
The story gets murky here with several top executives including the CEO Sanjiv Gupta leaving amidst charges of mismanagement as debts soared to nearly Rs 100 crore. There were different views on why the company collapsed. One view is that Bachchan, who was sick of the amateurish ways movies were being made in Bollywood and wanted to bring in professionalism and organisation to the industry, gave a completely free hand to the executives who ran the company, even as expenses kept mounting. Another view is that the company was way ahead of its time.
Perhaps it was a bit of both. Either way, it was a complete mess.
By March 1999, the company’s losses exceeded its net worth. Unable even to pay the interest on its loans, it was forced to approach the Board of Industrial and Financial Reconstruction (BIFR). The problem was Bachchan had given a personal guarantee for the loans of the company and now he stood to lose even his celebrated home as creditors came calling demanding payment. Among them was Canara Bank which had led a consortium of banks that extended loans to ABCL in 1996.
It was at this time that the quiz show Kaun Banega Crorepati was being planned and Bachchan with his trademark baritone and multilingual capabilities to go with one of the most recognized faces in the country seemed to be tailor-made to play the host. It was to be the beginning of the end of his woes. Smartly, he also went back to what he knew best, acting, and beginning with Mohabbatein, rolled out a number of mini hits that helped resuscitate his career.
The initial Rs 15 crore that he got for the 85 episodes of the KBC show, along with a spate of endorsement deals, helped Bachchan to pay off all the creditors. The company was rechristened AB Corp in 2001 and it marked the return of Bachchanalia.
—Sundeep Khanna is a former editor and the co-author of the recently released Azim Premji: The Man Beyond the Billions. Views are personal
(Edited by : Ajay Vaishnav)