MUMBAI: Canning its expansion plans is not just what’s brewing at Chennai based Pyramid Saimira Group.
The company announced its exit from the Hindi film distribution business on 23 September and also shut down a total of 33 screens in West and North India.
However, this is not the only cut down that has taken place. According to sources close to the development, the company has also shut approximately 45 screens in Tamil Nadu and another 20 in Karnataka. But Pyramid Saimira Group chairman and managing director PS Saminathan refutes this saying that only around 15 screens in Tamil Nadu have been de-hired.
“During the year 2007-2008, Pyramid Saimira had added huge number of screens in South India. In fact, we added more than 600 screens in the last fiscal year. It is inevitable that some of the screens we have added are unviable. We are having a dialogue with some of the theatre owners regarding optimization of rent etc. We are also de-hiring some of the screens where we find business potential is not there or it is unviable for us to operate. We have 414 screens across Tamil Nadu today and I think we would have de-hired around 15 screens. We have 96 screens in Karnataka,” he says.
Moreover, sources also inform Businessofcinema.com that Pyramid Saimira has dismissed its distribution president along with a few other executives who were based in Tamil Nadu and Mumbai from their posts with immediate effect due to lack of transparency and unethical business practices. “A few senior executives of the company in Tamil Nadu along with the president of distribution were hauled by the management for being involved in fraudulent activities over a period of time. The matter came to light after the release of Kuselan,” the source says.
When queried on the same, Saminathan declined to name names but informs, “It is true that we have dismissed some executives from our distribution division including senior executives. We have ordered a thorough enquiry, which is carried on by our vigilance department that is headed by a retired DIG of Police and supported by experienced investigators who have retired from the Indian Police Service. It is unfair for us to name individual executive’s name. This action is not due to Kuselan but as part of on- going exercise of prevention of leakages and cleanse the distribution methodology.”
Saminathan adds, “As you know in the film industry there are lot of malpractices and lack of transparency due to various historical reasons. Pyramid Saimira always wanted to structure the industry in a more transparent fashion possible and we have put in systems and procedures in place to create durable, structured, transparent distribution methodology. We have never shied away from taking hard actions. The decision to order an enquiry and dismiss / suspend some people in distribution division is part of that exercise.”
Coming to the screens that have been shut down in the North, Saminathan informs that three screens in Faridabad and four screens in Punjab have been shut. In the West, the company operated nine screens in Mumbai of which only two were operational as per information available with Businessofcinema.com. The latter were a part of deal that Pyramid Saimira had inked with Mumbai theatre owner Sharad Doshi, who is the son of Theatre Owners Association ex-president Pranlal Doshi. As per information, the deal with Doshi was cracked by one of the senior executives who have been dismissed.
Saminathan informs that the company had 25 screens in the Mumbai and Gujarat territories. “Those included the screens of Mr. Sharad Doshi. It is not fair on our part to name the screens as it will be inappropriate. So, kindly excuse me,” he says.
As far as the company’s decision to opt out of distributing Hindi films is concerned, Saminathan informs that losses to the tune of Rs 200 million (Rs 20 crores) were incurred.
The company has so far distributed Hindi films like Halla Bol, Jimmy, Sirf, Khushboo, Mukhbir Mr. White Mr. Black, U, Me Aur Hum, Krazzy 4, Om Shanti Om, Mumbai Salsa and No Smoking in select territories like Tamil Nadu and Kerala. However, all were not loss making films.
“These losses have already been accounted for in the last year – 2007-08 and Q1 of this fiscal. We have not incurred any fresh losses. Further, distribution is a portfolio business. Some films will make money and some will not,” Saminathan says.
Meanwhile, the stock price of Pyramid Saimira Theatre has fallen from its 52 week high of Rs 551 and is currently trading at Rs 114.15, which is close to its 52 week low of Rs 108 on the Bombay Stock Exchange (BSE).