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The seamier side of film financing


It would seem to be the perfect story line for a movie. It involved money, speed finance, suspected threats by goondas, and has a mysterious suicide by a leading producer in the end. Only, this was real, and it sent shock waves among Chennai's big film community.

G. Venkateswaran, popularly known as GV, was found hanging at his residence on Harrington Road on May 3. His family was away and his brother-in-law, who came to check, found the front door open and found GV hanging from the ceiling fan. If GV, who carved a niche for himself as a producer who attempted to give film production a corporate structure, was driven to death because of financial debt, was it not the death knell for such professional efforts in the film world?

Film financiers are the best friends for any filmmaker to turn to, during a crisis before releasing a film, but they could also be the worst enemy if the movie bombs at the box office. Behind the glamour and all sweet talk seen in public, the film business has a seamy dimension. Financiers do not hesitate to use goondas or political pressure to recover money and are ruthless in settling scores.

With GV not leaving behind any suicide note, among the many theories for the cause of his death, was the threats from financiers for repayment of loan. A string of flops led to GV slipping from the enviable position of being one of the most financially sound producers to an `unwanted producer'.

The case took an interesting turn with a Madurai-based financier, Anbu Chezian, giving a statement denying allegations that he had threatened GV for settling his debts. Mr. Anbu Chezian claimed that what was owed to him was a very small amount, but GV had borrowed huge money from other persons. He also denied he was involved in `speed interest' as usury has come to be called.

However, all those involved in film production claim that `speed money' was ruining the industry. Even big production houses borrow money on interest as it would be easy to account. These production companies do not get trapped as they are prompt in repaying the principal with interest. Thus the interest rates are not very high.

Producers who manage to get the dates of stars who are strong in the market invariably get stuck with `speed money financiers'. These producers would have booked a star when his movies were enjoying average success at the box office, but one hit and the value of the star changes overnight. He is rated very high and financiers are willing to pump money into his projects.

Even the producer takes steps to release the movie as quickly as possible to take advantage of the high popularity rating of the star. The interest rates are even calculated on a daily basis till the release of the movie. A producer could end up paying amount ranging from Rs. 10,000 to Rs. 25,000 as interest for Rs. 1 lakh, a filmmaker points out. However it is all a big gamble, as the movie has been given immediate financial relief with money being pumped in by distributors.

The producers get trapped if the movie fails as the distributors then demand a portion of their money. Actor Rajnikanth returned money to distributors after they failed to get returns from his movie, Baba. However, that is not the case with all stars. One of the main problems for spiralling production costs is the astronomical sum demanded by leading actors.

Film industry sources reveal that salary for leading actors ranges from Rs. 1 crore to Rs. 5 crores. Some leading directors also demand similar amounts for their projects. The money is not paid in one shot, but given in phases and completed with the shooting. If the movie flops, the actor or director would inform producers that he would give dates for another movie in which they could recover their losses. However, whether the second movie will run is anybody's guess.

On an average big film producers pay at least Rs. 50 lakhs as interest alone every year. One particular director who was very popular in his heyday is now struggling to pay the huge interest. As many as 50 films which have been almost completed have not been released because of financial problems.

The glamour of the tinsel world is that it could make or mar the career of an individual. The hard truth is that it could even take away the life of a producer. In a State where politics is strongly linked with cinema those in the industry hope that the Government would intervene in the issue for providing some financial relief at least for small producers. Big stars could also change from reel life to real life heroes by charging on the success of the movie.

In fact, the South Indian Film Chamber of Commerce, in a memorandum presented to the Union Minister, Ravi Shankar Prasad, pointed out that despite according industry status to cinema and RBI instructions to banks, loans were not being sanctioned.

The memorandum seemed to be prescient, when it pointed out that only professional financing would free producers from the clutches of usurious moneylenders. Will the Government lend a serious ear, after what has happened?

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