THE SATYAM FIASCO
The image of the Indian corporate world in general and of the Indian IT industry in particular took a dent when on 7th January, 2009 the then CEO of Satyam Computers, Ramalinga Raju resigned after confessing that the balance sheet of India's fourth largest software firm had been falsified. In a letter addressed to the Securities and Exchange Board of India (SEBI), Raju claimed that neither he nor the MD of the company had gained financially from the fraud and that the members of the board were in the dark about the company's actual position. He stated that "What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly (annualized revenue run rate of Rs 11,276 crore (US$ 2.32 billion) in the September quarter of 2008 and official reserves of Rs 8,392 crore (US$ 1.73 billion)). As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. It was like riding a tiger, not knowing how to get off without being eaten". The then board members elected Raju aide, Ram Mynapathi as the interim CEO.
Satyam's shares fell to 11.50 rupees on 10th January 2009, their lowest level since March 1998, compared to a high of 544 rupees in 2008. In New York Stock Exchange Satyam shares peaked in 2008 at US$ 29.10; by March 2009 they were trading around US $1.80. On 10th January 2009, the Company Law Board decided to bar the current board of Satyam from functioning and appointed 10 nominal directors. Chartered accountants regulator ICAI issued show-cause notice to Satyam's auditor PricewaterhouseCoopers (PwC) on the accounts fudging. Also the Crime Investigation Department (CID) team picked up Vadlamani Srinivas, Satyam's then-CFO, for questioning. He was arrested later and kept in judicial custody.
The Indian Government has stated that it may provide temporary direct or indirect liquidity support to the company. Soon, the government nominated a six member Satyam board headed by Kiran Karnik, former chief of the National Association of Software and Services Companies (NASSCOM). Besides Karnik, the board also included HDFC chairman Deepak Parekh, former Securities and Exchange Board of India (SEBI) member C Achuthan and Confederation of Indian Industry (CII) mentor Tarun Das. These men achieved the herculean task of fixing a multi million dollar scam which, by now, was being referred as 'India's own Enron scandal' and making the company fit so that it could be taken over by interested companies. At stake were the livelihood of nearly 40,000 Satyamites and the portrayal of corporate governance in India at the global level.
The revival began as the new board set to to do its job. Finally, on 13th April the bid for the former software powerhouse was won by the the IT of Mahindra and Mahindra, Tech Mahindra. Tech Mahindra offered Rs 58 for each Satyam share. Engineering major Larsen and Toubro (L&T) and private-equity firm WL Ross were among the other major contenders for the Hyderabad-headquartered Satyam. Karnik said, "This is the culmination of what we have been through. The final steps are now just about to be taken and I have very happy that at this stage Satyam is with a new investor. It has been a great company which was driven off-course. We as a board tried to put the fire and get it on course and I am please to say it has got it there now. There is new captain on board and he can take it forward as it deserves to be taken forward."
Welcoming the sale of 51 per cent stake in Satyam to Tech Mahindra, Director General CII, Chandrajit Banerjee said, “Tech Mahindra, a Rs 3,800 crores company is a competent IT services provider. This would help Satyam come back to its zenith. The takeover by Tech Mahindra would also immensely help Satyam regain its shareholder value and would also benefit its employees and customers.”
AUTOMOBILE SECTOR - AN ERA ENDS AND ANOTHER BEGINS
An era in Indian automobile sector ended when Bajaj Auto managing director Rajiv Bajaj announced that the company was all set to bid adieu to the scooter segment as it concentrates on motorcycles, in line with its ambitions of emerging as the world’s biggest bike maker ahead of Honda. ‘‘We have an opportunity to shoot for something... to be the largest motorcycle maker in the world,’’ Bajaj said as he announced growth plans for the motorcycle segment. However people still recall the days when liberalization had not yet set in and waiting lists for Bajaj scooters stretched into years, with people willing to pay a premium equal to the original cost to get hold of one. Once the world’s biggest player in scooters, selling over a lakh units monthly in its heyday, Bajaj’s long-running advertising campaign described ‘Hamara Bajaj’ as the symbol of a resurgent India is a hit amongst the people even today. Over the years, Bajaj has seen its scooter volumes drop to barely a couple of hundreds per month. The company, which dominated the scooter market with geared brands like Chetak and Super, suffered in the 1990s with the coming of motorcycles in the market that were not only more stylish and appealing but they also offered greater mileage.
While it was the end of the road for Bajaj scooters, Ratan Tata kept his promise of delivering the one lakh rupee car and commercially unveiled the Tata Nano on 23rd March, 2009. The Tata Nano is a rear-engined, four-passenger city car built by Tata Motors, aimed primarily at the Indian market and has a fuel efficiency of around 26 kilometres per litre on the highway and around 22 kilometres per litre in the city. The Nano was originally to have been manufactured at a new factory in Singur, West Bengal, but increasingly violent protests forced Tata to pull out in October 2008. Currently, Tata Motors is reportedly manufacturing Nano at its existing Pantnagar (Uttarakhand) plant and a mother plant has been proposed for Sanand, Gujarat. In early 2008 the news magazine Newsweek identified the Nano as a part of a 'new breed of 21st-century cars that embody "a contrarian philosophy of smaller, lighter, cheaper' and portend a new era in inexpensive personal transportation - and potentially, 'global gridlock'. The Financial Times reported: "If ever there were a symbol of India’s ambitions to become a modern nation, it would surely be the Nano, the tiny car with the even tinier price-tag. A triumph of homegrown engineering, the $2,200 Nano encapsulates the dream of millions of Indians groping for a shot at urban prosperity”. It looks like the Nano is all set to fill the spaces, both in the automobile sector and the hearts of millions of Indians vacated by the exit of Bajaj scooters.
BHAI v/s BHAI
Another big story that made all the headlines in the business world is the ongoing dispute between Mukesh Ambani's Reliance Industries Limited (RIL) and younger brother, Anil Ambani's Reliance Natural Resources Limited (RNRL) over the pricing of natural gas discovered in the Krishna-Godavari basin in 2002. At the centre of the dispute is the family pact made by the Ambanis brothers in 2005 when they decided to part ways. According to this deal brokered by their mother Kokila Ben, RIL was to supply 28 million cubic meters of gas a day at $2.34 per million units to RNRL for 17 years. However, in September 2007, after taking into account the factors prevalent in the contemporary world markets, the Indian Government fixed a price of $ 4.2/m Btu. This was challenged by RNRL and decision was later reversed by the Bombay High Court, which ordered RIL to supply the gas as per the original agreement. The war within the two factions of India's first business family continued as RIL took the matter to the Supreme Court.
On 29th July, 2009, while addressing the shareholders of RNRL, Anil Ambani lashed out at the Petroleum Ministry and accused it of bailing out RIL by portraying the dispute as a 'family fued over the division of sovereign national assets' and thereby helping it to dissuade from the commitment it had given to his company four years ago. The junior Ambani became emotional as he spoke about his late father, Dhirubhai Ambani and elder brother Mukesh. He said that RIL's greed to amass huge profits would end up causing the nation a loss of Rs. 30,000 crore and make the power generated from the KG basin costlier by a rupee per unit. Despite the binding commercial agreement between RIL and RNRL for the supply of gas, “it was unfortunate that RIL has tried every trick in the book -and apparently several outside the book -- to back out of its solemn, legal and contractual obligations”, he said.
On 8th August, RIL president Atul Chandra issued a statement which rejected the allegations of Anil Ambani as baseless, tendentious and motivated. However, Anil went a step further and took the battle to the public via advertisements in the newspapers. Shouting from the front page of virtually every news daily, the multi-crore campaign accused the petroleum ministry of favouring RIL at the cost of 'navaranta' NTPC in the gas row. Countering the claims made by Anil Ambani group that the government stood to lose because of the Petroleum Ministry's connivance with Mukesh Ambani-led RIL on the gas issue, an official statement said the Centre would earn Rs 84,000 crore from KG-D6 gas fields and not just Rs 500 crore as projected in the campaign.
The long-awaited hearing on the dispute in the Supreme Court started in late October with the bench comparing the tussle to a 'fight between two countries'. During the hearing Chief Justice KG Balakrishnan -- who is part of the three-member bench along with justices RV Raveendran and P Sathasivam -- said the dispute was 'not a fight between shareholders'. Another judge sought to draw a parallel with the rulers of two rival countries."It's like people of two countries don't have any problems, but there is a fight between two persons who are heading these countries. Thus, there is no fight between the two companies, but just between two individuals which has percolated down to the people," the court said.
The fallout of this case will have serious implications on the fulfillment of India's energy needs. Last year the country spent a whopping $ 80 billion on the import of petroleum and observers believe that the gas from the KG basin will certainly reduce our dependence on the oil-rich nations. The power and fertilizer industries will be the biggest gainers as they will be able to increase their operating capacity from the present 50 to 60 % due to the shortage of fuel. Once the gas from Krishna Godavari basin begins to flow - possibly after 2013 - it can add at least 10,000 MW to India's power output. The figure is more than half the country's current peak power deficit.
TURBULENCE IN THE AVIATION INDUSTRY
The Indian Aviation Sector which had been witnessing double digit growth in the last few years ended the decade at an all time low. The global economic meltdown, coupled by the problems between the staff and management meant that the fairy tale that had begun in the mid 2000s was all but over.
In August, the country’s largest private airline, Jet Airways was virtually grounded as its pilots went on an indefinite strike to protest against the sacking of two pilots. Besides, the management of the carrier was not ready to recognize the union called ‘National Aviators Guild’ that the pilots had formed under Girish Kaushik. Finally after five days of deadlock and hectic negotiations, the strike ended with the management hiring all the sacked pilots and the staff agreeing to dissolve their union.
Later in the year all the major private airlines came together to demand a ‘bailout’ in the form of reduction in taxes, prices of fuel , airport charges etc failing which they threatened to go on a one day strike. They insisted that the woes in the industry were due to the fact that they had to compete with the government aided carrier - Air India, had to encircle airports that did not meet international standards and deal with exorbitant taxes. "We are bleeding. Everybody is bleeding. Giving a helping hand to the airline industry is done all over the world," Naresh Goyal of Jet Airways said while asking the government for a rationalization of taxes. However, much to the relief of the passengers who had already suffered enough in the year, the private owners softened their stand and called off the strike even before it took off after considerable pressure from the government.
On the other side, the state run carrier, Air India piled accumulated losses exceeding Rs. 7,000 crore and debt exceeding Rs. 15,000 crore. The year saw the Maharaja being forced to cancel all pending orders and slash salaries of its staff. To make matters worse, the staff responded with strikes that added to the already existing turbulence. Later the government stepped in and initiated a complete restructuring of the airline after denying any official bailout.
The bottom line was that while India accounts for only 2 percent of global air traffic, our airways ended up incurring a collective loss of over Rs. 2,000 crore which is about a fifth of the total global losses in the sector.
CHANDRAYAAN FINDS WATER ON MOON
India had entered the elite lunar club on 22nd October, 2008 when India’s maiden lunar orbiter Chandrayaan was launched from Sriharikota and subsequently put into the lunar orbit 17 days later. But India’s moon mission seemed to be in jeopardy when news came in that the communication with the aircraft was suddenly lost on August, 2009. Instead of the proposed two year period, the prober had operated only for 312 days. ISRO Chairman - Madhavan Nair - said that due to very high radiation, power-supply units controlling both the computer systems on board failed, snapping the communication connectivity. He said that Chandrayaan had completed 95 per cent of its objectives which included placing the Indian flag on the Moon, constructing a complex spacecraft with 11 space instruments and collecting data on minerals in the lunar soil, among others.
On 24th September 2009, Science Magazine reported that NASA's Moon Mineralogy Mapper (M3) on Chandrayaan-1 had detected water on the moon. The Moon Mineralogy Mapper (M3), an imaging spectrometer, was one of the 11 instruments on board Chandrayaan. M3 was aimed at providing the first mineral map of the entire lunar surface. New data from Chandrayaan-1 has revealed how the moon 'produces its own water.' Much like a big sponge, it absorbs charged particles emitted by the sun, which then interact with oxygen on the lunar surface to produce water. A Chandrayaan-1 moon mission payload enabled scientists to study the interaction between the solar wind and a planetary body like moon without a magnetic field. In its 10-month orbit around the moon, Chandrayaan-1’s X-ray Spectrometer (C1XS) detected titanium, confirmed the presence of calcium, and gathered the most accurate measurements yet of magnesium, aluminium and iron on the lunar surface.
The American Institute of Aeronautics and Astronautics (AIAA) has selected ISRO's Chandrayaan-1 mission as one of the recipient's of its annual, AIAA SPACE 2009, awards, which recognize key contributions to space science and technology. The International Lunar Exploration Working Group (ILEWG) chose the Chandrayaan-1 team for giving the International Cooperation award, M. Annadurai, project director, Chandrayaan-1. The Chandrayaan team of the Indian Space Research Organization (ISRO) was chosen for the award for accommodation and tests of the most international lunar payload ever (from 20 countries consisting of India, the European Space Agency representing 17 European countries, NASA and Bulgaria) and the successful launch of the probe on PSLV rocket on 22nd October and the lunar insertion of the spacecraft carried out subsequently.
INS ARIHANT : INDIA'S FIRST NUCLEAR SUBMARINE
INS Arihant (S-73) is the lead ship of India's Arihant class of nuclear-powered submarines. The 5,000-6,000 tonne vessel was built under the Advanced Technology Vessel (ATV) project at the Ship Building Centre in Visakhapatnam. The INS Arihant is to be the first of the expected five in the class of submarines designed and constructed as a part of the Indian Navy's secretive ATV Project. The submarine is reported to be similar to the Russian Charlie-II class submarine, which India leased from the Soviet Union between 1988 and 1991. The vessel will be powered by an 85 MW pressurized water reactor with enriched uranium fuel. A land-based prototype of the reactor was first built at Kalpakkam and made operational in September 2006. Successful operation over a period of three years yielded the data that enabled the production version for Arihant. It was reported that an 80MW nuclear reactor was integrated into the hull of the ATV in January 2008.
The INS Arihant, was introduced to the public on July 26, 2009 at a symbolic launch ceremony by Prime Minister Manmohan Singh's wife Gursharan Kaur. The launch coincided with the tenth anniversary of the conclusion of the Kargil War.
Arihant can acquire surface speeds of 22 to 28 kmph (12-15 knots) and submerged speed upto 44 kmph (24 knots). It has the capacity to carry a staff of 100 men and will be armed with torpedoes and missiles including 12 ballistic missiles. INS Arihant is entirely built in India with Russian assistance with an investment of Rs. 30,000 crore. The name of the vessel, Arihant is in Sanskrit and literally translates into destroyer of enemies. The completion of the INS Arihant will make India one of six countries in the world with the ability to design, build, and operate its own nuclear submarines (the others being the United States, the UK, Russia, France, and China).
WORLI-BANDRA SEA LINK : THE NEW ICON OF MUMBAI
The Bandra Worli Sea Link (BWSL), officially the Rajiv Gandhi Sea Link, is a cable-stayed bridge with pre-stressed concrete viaduct approaches, which links Bandra and the western suburbs of Mumbai with Worli and central Mumbai, and is the first phase of the proposed West Island Freeway system.
The Rs. 1600 crore ($ 400 million approx.) project of Maharashtra State Road Development Corporation (MSRDC) was executed by Hindustan Construction Company, with design and project management by DAR Consultants. The bridge was dedicated to the public on 30 June, 2009 by Congress President and UPA Chairperson Sonia Gandhi, although only 4 of 8 lanes are in service. On the previous night, fireworks, lights and laser show, coupled with music, was held at the main cable-stayed bridge at the Bandra end. It was enjoyed by thousands from the Bandra promenade and Mahim beach, but was not clearly visible to those at Worli sea face and Dadar due to slight drizzles, haze and cloudiness. There was no space left at the sea-faces as thousands gathered to view the show.
An automatic system will identify vehicles going over the 50 kmph limit. MSRDC engineers said cameras on the link can take swift 360-degree turns and capture images of vehicles within 1.5 km. Two cameras fitted under the cable-stayed portions of the link will keep watch on the movements of boats and ships. The Sea Link reduces travel time between Bandra and Worli from 45-60 minutes to 7 minutes. The link has an average daily traffic of around 37,500 vehicles per day, about half the pre-opening estimate of 70,000.
The project was initiated more than 10 years ago in 1999 and was supposed to be completed within 5 years but it was delayed due to public interest litigations. The foundation stone was laid in 1999, by Shiv Sena supremo Bal Thackeray.
SACHIN TURNS 20 AS INDIA BECOME NUMERO UNO IN TESTS
In India, they say, cricket is a religion and Sachin is God. All throughout the year, the God of Indian cricket looked in cracking form as he tore apart the best bowling attaks from around the world. The 'Little Master' who began his glorious career on 15th December, 1989 vs Pakistan completed two decades in international cricket in 2009. The journey so far has seen the man from Mumbai dominate the gentleman's game, inspiring a whole generation of young cricketers and being the greatest ambassador of both India and cricket. Speaking to reporters after completing this great feat, Sachin recalled the days when the tennis elbow injury almost cut short his career and the way he came back to the top of the game with the help of his wife, Anjali. In fact such was the admiration for this man that when Bal Thackeray accused him of betraying the Marathi cause by claiming that Mumbai belonged to all Indians and not only the Marathis, it was the Shiv Sena supremo who had to face the music from the media and the general public. Besides, Sachin also became the first player in the world to complete 30,000 runs in international cricket. His brilliant innings of 175 against hte Aussies in Hyderabad, although it came in a losing cause was arguably the best knock in 2009.
The 'Men in Blue'[ also ended the year at the top of ICC's Test ranking. Although the rating that began in the year is just a clever marketing gimmick of cricket's apex body, it is the best gift that Dhoni's boys could have given their cricket crazy country for the new year. Nevertheless, it is a testimonial to the fact that the Indian team has beaten the best Test playing sides and have consistently performed well even outside the country. Also with the victory against Sri Lanka at Green Park Stadium, Team India completed 100 wins in the game's foremost and longest version. Delhi player Gautam Gamhir, nick named the 'Second Wall' from fellow opener Virender Sehwag won the ICC's Test Player of the Year, courtesy his four centuries, 2 each against New Zealand and Sri Lanka. The skipper M. S. Dhoni retained his spot as the ODI Player of the Year.
However, it was not a complete honeymoon for Indian cricketers. Thanks to Shoaib Malik who scored 128 off 126 balls, Pakistan beat Team India by 54 runs in their first match in the 2009 Champions Trophy. Also the rain Gods played a spoilsport as the match against the Aussies was washed out and the Indians were elliminated even before the knockout stages. More ignominy came in the 2nd edition of the T20 World Cup held in England. In spite of winning all their Round 1 matches ( against minnows Ireland and Bangladesh), the team was routed in Round 2 with all other teams in the group namely, West Indies, England and then South Africa demolishing the former champs.
While we have managed to earn the title of the best test playing side in the world, we still have to go a long way as far as cricket administration is concerned. This issue came into prominence as the last ODI in the India-Sri Lanka Series in national capital Delhi was abandoned as the pitch was unplayable. Although the ICC has not yet taken its decisiopn on the issue, a two year ban of the Firoz Shah Kotla, which incidently was also criticized during the Champions League, could see the city lose its status as one of the venues of the Cricket World Cup, 2011.
IPL's SOUTH AFRICA SAFARI
When the Home Minister P Chidambaram said that he cannot provide adequate security to international cricketers during the IPL as a large number of security personnel would be on election duty, the future of the greatest extravaganza of cricket looked bleak. However, the IPL commissioner and the man behind its creation, Lalit Modi rose to the occasion and after much deliberation decided to shift it to an alternate venue. South Africa, with a large Indian population, and with weather and conditions suitable for playing cricket was chosen ahead of its closest rival, England.
The season began on a high as English cricketers, star batsman Kevin Peterson and the flamboyant all rounder Andrew Flintoff were auctioned for a record fee of US $ 1,550,000 by Bangalore Royal Challengers and Chennai Superkings respectively. Kolkata Knight Riders coach John Buchchan’s four captain theory found no takers, except for his boss Shahrukh Khan and the ‘Prince of Kolkata’ was replaced by wicket keeper batsman Brendon Mcullum. In spite of the change in guard, the Knight Riders were done in by Yusuf Pathan’s smashing of Ajantha Mendis in the super over and the dressing room revelations by the Fake IPL Blogger. Although the team finished at the bottom of the table, they managed to ouster defending champs Rajasthan Royals from the tournament. The Kings XI Punjab and Mumbai Indians failed to make it to the knockout stages in spite of good performance in the early stages of the league.
Although T20 is said to be the game of the youth, retired players proved that age was no consideration even in the shortest version of the game and thing that mattered the most was cricketing skill. Former India leg spinner and the captain of the Royal Challengers, Anil Kumble and Deccan Chargers skipper and former Aussie keeper Adam Gilchrist emerged as the best players of the tournament. Anil, who took over the captaincy from KP, won accolades for his impressive bowling and took 21 wickets, thereby becoming the second highest wicket taker of the league. Meanwhile his counterpart at Hyderabad finished as the second highest run scorer of the tournament. His series tally of three half centuries included a quick fire 35 ball 85 that sealed the fate of the Delhi Daredevils in the semis. And in the finals, while Jumbo won the battle of the captains and the man of the match for his effort of 4/16, Gilly had the last laugh as Deccan beat the Royal Challengers by mere 6 runs. Ironically, the team that finished as the wooden spoolers in 2008 was crowned as the DLF IPL Champions in 2009.
Matthew Hayden, who made 572 runs in the series, was awarded the ‘Orange Cap’ and the ‘Purple Cap’ went to R. P. Singh for his taking 23 wickets throughout the league. The Deccan Chargers captain Adam Gilchrist was adjourned as the ‘Player of the Series’ for his herculean effort of scoring 495 runs and 18 dismissals in the tournament. And for the record, while he might have been able to take IPL to new destination, Lalit Modi lost the presidency of Rajasthan Cricket Association to C P Joshi in the later part of the year.
THE MOONWALKER IS DEAD
The death of the legendary King of Pop, Michael Johnson on 26th June, 2009 was one of the biggest tragedies of the year gone by. The news came a few days after he had announced to perform 50 shows as a part of ‘This Is It’ concert to be held in O2 arena, London between July, 2009 and May, 2010.
However, Jackson collapsed at his rented mansion at 100 North Carolwood Drive in the district of Los Angeles. After the attempts of his personal physician to revive him failed, the paramedics of the Los Angeles Fire Department were called in. The CPR was performed on him and attempts to resuscitation continued on way to the hospital. At 2:26 local time, MJ was pronounced dead.
After a private family service at Forest Lawn Memorial Park's Hall of Liberty, the memorial to honor the greatest performer of the 20th century was held on July 7, 2009 at the Staples Centre in Los Angeles. A report suggested that the memorial was observed by nearly one billion strong TV audience and nearly 33.1 million people in the United States. Stevie Wonder, Lionel Richie, Mariah Carey, John Mayer, Jennifer Hudson, Usher, Jermaine Jackson, Shaheen Jafargholi etc performed at the event. Jackson's 11-year-old daughter, Paris Katherine, cried as she told the crowd, "Ever since I was born, Daddy has been the best father you could ever imagine ... I just wanted to say I love him ... so much.”
On August 24, multiple news outlets quoted anonymous sources as stating that the Los Angeles coroner had decided to treat Jackson's death as a homicide; this was later confirmed by the coroner on August 28. At the time of death, Jackson had been administered propofol, lorazepam and midazolam. Law enforcement officials are currently conducting a manslaughter investigation of his personal physician, Conrad Murray. Jackson was buried on September 3, 2009, at Forest Lawn Memorial Park in Glendale, California.
THE BLACKOUT AT THE MULTIPLEXES
In February, earlier this year, news surfaced of the dispute between the film producers and the owners of the multiplex cinemas over revenue sharing. Soon the beans were split as the producers and owners decided to refrain from releasing any new movie in the 200 odd multiplexes in India after April 4 until the matter had been settled. Not only did the two month long strike lead to losses exceeding Rs. 300 crore, the audience had to be satisfied with re-runs and old releases.
In fact the saga began with the producers demanding the 50 per cent share of all film revenues irrespective of the film’s box office performance, as has been the case in many other countries across the world. However, the owners were ready to concede to the demands of the producers only if the film was a box office hit.
A big hit was what the B town was desperately in need of, in early 2009. In spite of high profile actors, publicity gimmicks and the hype surrounding them, much awaited movies like Rakeysh Omprakash Mehra’s 'Delhi 6', Gauri Khan’s 'Billu Barber' and Nikhil Advani’s 'Chandani Chowk to China' failed to rake in the expected moolah at the box office. Ironically, low budget movies like 'Raaz - The Mystery Continues' and 'Dev D' delivered the goods and gave the industry some reasons to celebrate. Initially as both the sides refused to budge, the producers put up a united front with actor turned producers, Shahrukh Khan and his bête noire, Aamir Khan, coming together for a show of strength in a bid to intimidate the opposition.
Meanwhile, the distributors argued that the unless the film was a box office success, Western norms regarding the sharing of revenue could not be applied in a country like India where the majority of the people still watched films in single screen cinemas. They said that if they ended up sharing revenues on all films, a majority of which were crashing at the silver screen, it would spell doom for the multiplex industry, which is still in its nascent stages and has a long way to go. A large number of these multiplexes are located in posh urban areas and are struggling to service the debts that financed their construction or expensive rents. They were also quick to blame the producers for the mess that the recession hit Hindi film industry was in, with Shravan Shroff, the managing director of the Fame Cinema chain, saying, “When the producers started giving bad films to us, the audiences ran away. So, we are saying to them in simple words: give us good films and we are ready to pay you good money.”
After weeks of hard bargaining and negotiations, the stand off ended with both parties agreeing to a final settlement according to which 50, 40, 32 and 35 per cent for the first, second, third and fourth week respectively for all movies would be shared amongst the parties. Finally, as the strike ended on June 5, the movie goers heaved a sigh of relief. Soon afterwards, John Abrahim - Katrina Kaif starrer New York which released on 26th June became the first blockbuster hit of the year.
SOURCE
- www.news.bbc.co.uk
- www.business-standard.com
- www.dnaindia.com
- www.entertainment.timesline.co.uk
- www.eturbonews.com
- www.keralapals.com
- www.ndtvmovies.com
- www.panasianbiz.com
- www.sniffindia.com
- www.timesofindia.indiatimes.com
- www.wikipedia.org
- www.zeenews.com
( This is the third and the last article on the significant events of 2009 )
The first article was pretty interesting :-D
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