Sucheta Dalal :Alagh2--Related party transactions
Sucheta Dalal

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Alagh2--Related party transactions  

July 2, 2003

EXPENDITURE INCURRED WITH “RELATED” PARTIES 

 

I. Sanjay Khan, Numero Uno International. – From 1996 onwards – Rs. 1641.6 lacs  

 

Sanjay Khan is a director of Numero Uno Int. Ltd and a close friend of Mr. S. K. Alagh. 

 

(a) Jai Hanuman From 1996 to 2001 - Rs. 1556.6 lacs 

We had committed trading/sponsorship of Jai Hanuman produced by Numero Uno Int. Ltd. From June 1996 on the behest of the Managing Director, with a minimum commitment of 60 secs per episode. Mrs. Maya Alagh was acting to this serial. 

The rates being given in Britannia were also higher than the prevalent marker rates. In our estimate, we have paid a total of close to Rs. 200. ** This was objected to by the then Marketing Manager Mr Ashok Support through a detailed analysis (Enclosed). However, a marginal reduction of Rs. 5000/- per 10 sec was done after 6 months. 

This commitment was a force-fit for most of the weeks, as we normally do not have continuous activity throughout the year. 

(b) Maharathi Karma / 1857 Kranti - From 2003 - Rs 75 lacs 

These programs produced by Numero Uno Int. Ltd. Are currently being sired on DDI National Network. As directed by the Managing Director, this program was taken up for consideration and the proposal was then forwarded to Initiative Media, the media agency for BIL, for their recommendation. 

The initial proposal was received by us during April, 2001 for 1857 Kranti. Mrs Maya Alagh was acting in 1857 Kranti. While we were preparing to give an advance of Rs. 50 lakhs as part our commitment. We were informed at the last moment that due to changer in DD’s policies, the program will not go on air. We did not release the advance. 

During December 2002, the matter was revived once again. This was, however, with an additional program to 1857, Kranti called Maharathi Karan. 

The initial recommendation of the media coordinator Mr. V. Srinivasan was to commit of Rs. 40 lacs in the producer for both the programs, however in contravention to the

Chairman’s directive of not including any program, which includes Mrs. Maya Alagh in the cast, 1857 Kranti, without approval, was reconsidered. If we had adhered to this directive, the commitment could have been Rs. 20 lacs. 

A letter has been is used to the event management company to conduct 5 events during Jan-Dec ’03 at a maximum cost of Rs 18.75 Lacs. Other than the two events already conducted, a cancellation letter has now been issued to the party for the balance 3 events, on the introduction of Mr. Sea. 

II. Prahlad Kakkar from 2000 to 2003 Rs. 814.2 lacs. 

Offspring and offshoot are group companies owned by Mr. Kakkar. He is close friend of Managing Director. Almost 60-70% of our advertising film production have been done with him. 

Genuine competitive bids are not taken while evaluating the cost of Mr. Kakkar in fact it is a standing joke amongst producers when Britannia, asks for competitive quotes, as they know it is a mere formality. It appears that we have paid 10-15% more than the marked rate. (Rs. 102 Lacs). 

In 2001, we made 3 films using Anjin, Mr Karkar’ son, for Rs. 67.7 lacs. This was again a unilateral decision taken by the Managing Director to oblige Mr. Kakkar. Neither the advertising agency not the marketing team were aware of the same, The reason stated was that as Anjin was growing up, we will not have any new commercials to air with his “childlike demeanour“. We have not aired even a single film till date and we do not plan to do on. The amount of Rs. 67.7 lacs would therefore qualify for a total write-off.” 

 

III. Kids for tiger From 2001 to 2003 – Rs. 337.2 lacs 

The Sanctuary Britannia Tiger Program is run by Mr. Bittu Segal, a close friend of the Managing Director. His daughter is married to the son of Maj Pathak (BIL’s agent for Army ordera). 

The program is a school contact program with a view to create a supportive community of teachers through whom the school children are approached for nature education and environmental protection awareness. 

This program was initiated unilaterally by the Managing Director without taking comparative quotes. Normally we would not spend much high amount on projects with just FR valued and to ensure financial support to an individual. 

 

 


-- Sucheta Dalal



 



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