MUMBAI: Chennai-based Pyramid Saimira Theatre Ltd (PSTL) has undergone major restructuring after being embroiled in controversies for the last few months. The company’s chairman and managing director PS Saminathan has stepped down from his position as chairman but will continue as the managing director and focus more on operational management.
The company’s founder director N Narayanan has taken over as the chairman with immediate effect. Meanwhile, PSTL will be merged with its US subsidiary and streamlining its operations to bring down the risk levels.
As was reported by Businessofcinema.com, the Securities and Exchange Board of India (Sebi) had recently barred promoters Nirmal N Kotecha and Saminathan from trading in securities over a fake letter and buyback offer.
PSTL has now decided to approve the merger of its subsidiary Fun Asia USA with another company in order to strengthen the market position of the group in the US. The company will, however, continue with its expansion plans in Malaysia, where it made cash profits. The board also approved the expansion plans of sister company Pyramid Saimira Production International and consented to a plan to bring in fresh debt and equity into that company.
Saminathan said, "Due to huge business loses, the company has suffered working capital erosion. Further, the global meltdown, national recession and failure in the film industry have put enormous strain on the entire film industry. With a view to strengthen the core exhibition business and also to reduce the risk levels in the business and bring back growth and profitability, I have decided to focus more on operational management and hand over chairmanship."
PSTL has been under financial stress with a loss of Rs 1 billion over the past year and new claims from the Income-Tax department. "A large investor sold shares, exiting the company under questionable circumstances, which also reduced the company’s ability to handle the situation," said Narayanan.
"In the last one year, the company suffered a business loss of about Rs 1 billion (Rs 100 crore). Moreover, a large investor exited from the company in questionable circumstances, which has also reduced the company’s ability to handle the situation," Narayanan said.