“You can call me selfish or label me a coward,” begins producer-director B Ashok Kumar’s note, something he is said to have written before killing himself, “but I had just two choices: Suicide or murder.” The letter then goes on to describe in detail his loan arrangements with Madurai financier Anbu Chezhiyan, his relationship with cousin and director Sasikumar, and a note of apology to his family. Ashok Kumar, like many other producers, had opted to fund his venture by borrowing from a private financier. But, he is neither the first, nor will be the last to resort to borrowing from lenders like Anbu Chezhiyan, who are said to have powerful political connections.
In July this year, Kollywood financier Mukanchand Bothra, in the business for 37 years and whose LinkedIn profile mentions an association with the BJP and the AIADMK, was accused of extortion by producer JSK Sathish Kumar.
Sathish Kumar, who had produced movies like Thanga Meengal and Kuttram Kadithal, had said that Bothra demanded his houses worth Rs 40 crore for a loan amounting to Rs 15 lakh. Director Suseenthiran, in a video clip now surfacing on news channels, has revealed that Ajith – one of the superstars in Tamil cinema – was himself a victim of harassment during the filming of Naan Kadavul. In a letter released later, Suseenthiran also names directors Gautam Menon and Lingusamy as having been subject to harassment by Anbu Chezhian. Others include G Venkateswaran, who was found hanging in his home in May 2003. Pressure from financiers was purported to be the reason of his death.
“These unorthodox financiers charge a minimum interest rate of about 3 per cent per month,” says SR Prabhu, treasurer of TFPC in conversation with Silverscreen. “It can go up to 10 per cent. While authorised lenders look at your financial stability and project viability before offering a loan, and approach a court in case of dispute, there are others who have their own unique methods of recovery.” The process of offering a loan, especially with the “others” as Prabhu calls them, begins with a recce of the borrower, followed by taking into possession items that would offer surety – “in this case, it would be cheque leaves, bond sheets, and even letter pads,” declares Prabhu, “or blank sheets with the borrower’s signature.”
But, the unseemly, or ‘unique’ methods of lenders, or the murky process of obtaining loans from them and their subsequent repayment are only one half of a bigger issue. Institutionalised funding, or funding by banks for movie projects has reportedly come to a standstill since 2015. YES Bank, IDBI and EXIM, the players who had tested waters by lending to producers, have since become dormant after a few unsuccessful attempts at retrieving money. EXIM had funded Veer Zara, Dhoom and Dhoom 2 while Yes Bank had rolled Break Ke Baad. The interest rate, as of a 2011 article in the newspaper DNA, was about 15 per cent per annum, with a repayment period of up to 18 months. The article also addresses the then growing reluctance of banks to invest in films. It quotes an IDBI bank executive as saying that the system of minimum guarantee, which was in place to discharge the liability to the lender with the minimum guarantee payment from the distributor was done away with. This would have ensured that the lenders got paid irrespective of a movie’s performance.
Producer Dhananjayan G, in an article he had authored for DTNext earlier this year, mentions that IDBI and EXIM had funded film production at a rate of 18 per cent per annum if the producers were able to offer a collateral and invest 30 to 40 per cent of the budget on their own. “But banks stopped backing films after a producer failed to repay a loan. It had become a court case,” Dhananjayan tells Silverscreen. “When they saw that producers were releasing their movies without settling their dues, they grew worried.”
Elaborating on other ways through which funds can be mobilised, Dhananjayan explains that associating with a corporate – as was done with Anjaan and Irudhi Suttru – is one way to go about it. The DTNext article though, mentions that Lyca Productions is the only corporate to still exist in the Tamil industry. “Otherwise, you can crowd-fund [Lucia], or engage in co-productions. The percentage may vary, but when you raise 80 per cent from the market, and the film fails, you are completely stuck,” he tells us over the phone.
Of course, banks investing in films can hedge their risks, as pointed out in this article by Vivek Rangachari, business head at DAR Investments, “but cinema is an industry where there is nothing called a stake; it’s all about how much you recover. If you think you will recover 200 per cent, it is a joke,” declares Dhananjayan. A Forbes article states that producers can consider measures like insuring their film against unforseen circumstances and making the sector attractive for bonding companies to renew the interest of banks in films.
A proper institution like that of a film chamber where money is raised from various sources, is another way to go about mobilising funds, he says. “Where there are proper recovery mechanisms. The NFDC does that on a small scale.”
But first, we need to understand the issues faced by producers, declares SR PRabhu. “We can then take a collective call. It will not happen in a day. Also, the government has to recognise the industry. There’s no designated bureaucrat to look into our issues. Producers have no other way; banks are not ready, artistes and technicians want money upfront, what can they do, really?”