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Producer Ashok Kumar's Suicide Underscores A Pitfall In India's Movie Financing Business

This article is more than 6 years old.

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When he died tragically on Tuesday, November 21st, 43-year-old film producer Ashok Kumar made it clear in his suicide note that it was the movie business that had killed him.

To be more specific, it was the incessant pressure of the financial burdens he had incurred from producing his films, and in particular the trauma he suffered due to continual threats and harassment from the loan shark to whom he owed money.

Kumar hanged himself in his residence on Tuesday evening. In the two-page note he left behind, he wrote:

For the last 10 years all the films we have produced have released on time. The only big sin that we committed was to take a loan from Anbu Chezhiyan. For the last seven years, he has been taking interest upon interest from us, but for the last six months he has been behaving in a very derogatory manner. Using his men he has been targeting the women and elders in my house. Who can I go to for help?

Kumar alleged that the financier Anbu Chezhiyan had connections in the police force, and enjoyed political support as well. He wrote that it hurt him to see the strain his cousin Sasikumar, a film director whose projects Kumar managed, had also been put under as a result of Kumar’s financial mistakes.

The plague of illegal loan-sharking is endemic throughout India’s film industry, and especially in the Tollywood production cluster in the south Indian state of Tamil Nadu. Most producers I've spoken with there are in a near constant state of financial duress, because the only way many can fund their productions is by taking loans from reputed sharks like Chezhiyan, often at sky-high interest rates of 3% per month. If their revenues from their films aren’t sufficient, or if they can’t be collected quickly enough to pay down the rapidly mounting interest that accrues on their loans, they are often forced into behaving in desperate and seemingly irrational ways.

As an experienced veteran of Hollywood who has seen more bad business behavior than I care to remember—I’ve seen practices in the Indian film industry that have shocked me for their merciless brutality. They stem from the fact that the sort of bank and institutional capital that is readily and cheaply available in the U.S. is virtually non-existent in Kollywood, and from the risky methods producers must use to fund their productions.

For one thing, the way that Indian blockbusters are greenlit, funded and sold is radically different from the way they are originated and distributed in America. Hollywood studio movies are typically (though not always) the products of long, laborious development processes where screenplays are honed over the course of many months, if not years; where stars and directors are assiduously charmed and courted for their input, commitment and participation; where production and distribution is overseen by armies of executives and attorneys who crank out hundreds of planning documents and contracts to nail down every little detail of the venture; where finance is elevated to a science of risk-reward calculations, net present value analyses, long-term cultivation of banking relationships and meticulous cost minimization and profit maximization strategies.

And not least, Hollywood is an environment where film producers can generally count on the legal system to treat them fairly if they run into problems.

In India, on the other hand, a movie gets greenlit the instant a producer gets a major star to commit to a movie concept. There may or may not be a script, and if there is, chances are that it isn’t very good. The star is, more often than not, agreeing to participate based on his or her relationship—often familial—to the producer, and his or her assessment of the likelihood that the promised salary will actually be delivered. There are no spreadsheet finance jockeys calculating IRRs or hurdle rates because the sources of funding are so limited. Often, and in the case of Ashok Kumar, the producers are forced to turn to private lenders/loansharks who extract those aforementioned usurious interest rates. Banks won’t lend because there are no contracts that can be collateralized; practically everything is done by handshake.

So when the typical Kollywood producer borrows against these un-collateralizable presale agreements at usurious rates, they must then scramble to sell as many territories as possible as quickly as possible to repay the production costs in hopes of salvaging a profit, while avoiding the potentially disastrous possibility that pirated copies of the film will get out before the official theatrical release. Then, if the movie is a success, and the producer is able to pay off the loanshark's debt and huge interest obligation, he gets to live to see another day and they start all over again with the next film.

Although usury is illegal in India, a loanshark like Anbu Chezhiyan is able to get away with it because of his ties with prominent, often corrupt government officials. In his suicide note, Ashok Kumar said, “All the people like the big shots in the class of officers (police), in the government, Cinema Federation Chief Selvin Raj, are in his pocket. I cannot oppose him.”

One party who has a vested interest in seeing that tragedies like Kumar's don't happen again is Vishal Krishna, President of Tamil Nadu's Producers' Council. "This industry cannot go on like this," he says. "Long back, there may not have been cooperation, but we are united now.”

What India and Tamil Nadu need to do is to bring traditional, institutional financiers into the business, to give them the incentives, infrastructure and support they need to feel comfortable funding independent film producers. Also, and this may be infinitely more difficult, India will need to dismantle the corrupt structures and systems of relationships that allow violent thugs to operate with impunity in the film sector.

Read More: Indian Government Officials Step In To Protect Superstar Actress Deepika From Beheading Threats 

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