GV Films, launched in 1989 in Chennai was the only public limited film company to be ever set up in India. G. Venkatesan better known as GV, also the brother of director Mani Ratnam, had a family background in the film industry. He was a trained chartered accountant. It was his contention that a company which handled production, distribution, and exhibition cannot lose as the loss in one area is compensated by gains in the others. This was theoretically correct, but things in film industry do not quite work like that.
When he started his company the Tamil film industry was going through multiple crises. It was plagued by video piracy, steep star prices and the arrival of cable TV. The success ratios were coming down. The film business had become a huge gamble. It was really like playing the horses.Unlike a manufacturing company, films had no assets back up. If a film fails every thing gets wiped out. Many in the industry were sceptical about GV going public for this reason as he was not being backed by assets. He said it takes time and Warner Brothers took 50 years to build assets. Sadly his three films during this period did not do well.
The total capital raised by GV was Rs 5.75 crores. He paid decent dividends for three years. His first three annual general meetings had a festive air about them with his 10,000 shareholders coming from all over the South with great hopes. However by the fourth AGM it became known that the company was on the brink of disaster. The subsequent balance sheets were full of controversial statements and did not reflect reality. For instance the company did not make any provisions for taxation for three years. Financial analysts felt GV had used all the loopholes in the income tax act. The authorities were bound to catch up with him sooner or later.
GV remained confident that in spite of the many problems which were being thrown up everyday he would not let down his shareholders. It was however becoming increasingly obvious that he would not be able to live upto his intentions. Out of the 25-odd films the company distributed in the three years since it went public, only three made money. Tamil film industry was coming to terms with many new issues such as video piracy, cable television and the growing popularity of CDs. The much-acclaimed multi-starrer Thalapathi produced by GV with Rajanikanth, Mammooty and others did well but was not a blockbuster. This meant he was not able to meet his interest payments as he had hoped.
The initial enthusiasm of the shareholders was disappearing fast. His balance sheets were a study in desperation. In spite of several ups and downs, GV, with his customary confidence announced a tie up with Sony Corporation for the manufacture of compact discs, digital compact cassettes and mini discs. The initial phase of the project was to cost a little over Rs 10. 5 crore. He was planning a rights issue. There were sceptics. To start with Sony does not give technology to anybody. The Corporation has always believed in a 100 per cent subsidiary or taking a 50 percent shareholding. It never got into technology transfer agreements. As predicted nothing came out of the so-called Sony tie-up. GV then said he was going slow as it is better to wait and watch the success and or otherwise of the mini disc and the DCC before launching the CD. Having said that, he tried launching the CD project in another form.
He was getting into an arrangement with IDL Chemicals of Hyderabad going as far as signing a memorandum of understanding with the company. IDL was supposed to manufacture the CD, with technology from a subsidiary of Philips. The project cost was Rs 21 crore to be put up by IDL. GV Films was to lift the entire 5 million CDs which were to be manufactured per annum. The Hyderabad company would pay GV Rs. 40 per piece.
This project did not take off. In spite of thinking ahead of times, he went totally broke. His life ended in tragedy. He hanged himself at his home at age 55 in 2003.