Top studio called out for non-payment of dues

Shikha Kapur

Last week, it was reported that Shikha Kapur, COO, Eros International, stepped down from her position, putting an abrupt end to her year-long stint at the organisation. Almost 20 members have exited the production house in the past few months, some along with her, giving credence to the industry buzz that the organisation has been defaulting in its payment of salaries and dues. Shortly after, several former employees took to social media to call out the company for its non-payment of dues.

A senior employee, who left the Kishore Lulla-led organisation this month, says the monetary constraints began well before the pandemic. "The management has been callous. The place doesn't feel aligned to my value system. The employees are not cared for and the lockdown resulted in an emotional shift. People have not left because of money. They left because they were suffocated. There are angry employees in every corner of the company. Movie making is a collaborative process where if vendors are not being paid measly amounts like 25k and 1 lac, they wouldn't want to work with you again. These monies haven't been cleared in years and Eros believes they can get away with it because no one flags it off." The ex-employee adds that following Eros's merger with STX Entertainment in 2020, one assumed the company would be on firm ground. "Their issues are functional. And they have a tendency of not paying people. Last year, they hadn't cleared a vendor's dues, he made a big noise about it after which it was cleared. Why do we need to do andolan to get what's due? They say things like, "It's only one month's money, why are you asking for it?" There is a lack of compassionate leadership. My biggest concern was for small vendors who were constantly told by the finance department why are you following up. They are too small in the system to protest because they fear not getting work in the future."

Eros's productions include 'Bajirao Mastani'

Another senior resource who left late last year informs us, "This has been happening routinely for the last few years. People keep leaving because there is an ethical issue more than a financial one. But their outlook on business is flawed. Eros now had the first mover advantage but the platform could never capitalise. They keep bluffing their numbers on releases. Old collaborators are backing out because they are given lopsided deals. What happened with Shikha Kapur's team has been happening to people for more than a year. Manav Sethi, the former COO too, had to go through a lot to get his full and final salary from the company. Eros also keeps senior employees at arm's length and this lack of transparency issue is troubling."

Another senior leader from the creative team, who quit in mid-2020, rues that he has not been given his year-end bonus. "Salaries would come late, which can be attributed to the pandemic. Letting people go can be justified, but how do you explain not paying dues? They are a listed company. I left in the initial days of the lockdown because they owed me certain money in January 2020. Taking into account the bonus and the full-and-final settlement, they owe me close to R60 lakh," he says. A vendor, who worked on media sales with Eros, says that the company hasn't cleared his dues of close to Rs 10 lakh since 2019. However, two current employees confirmed that they are paid timely salaries, while Kapur and her team were also given their monthly dues.

'Manmarziyaan'

Founded in 1977, the production and distribution company has backed several films, including Manmarziyaan (2018), Shubh Mangal Saavdhan (2017) and Bajirao Mastani (2015). It also launched its movie-on-demand vertical, ErosNow, in 2012.

When mid-day reached out to Eros, Pradeep Dwivedi, CEO, said that the studio was "doubly hit" by the lockdown. "We had 7 films on floors and everything came to a standstill. Theatrical shutdown impacted us heavily too. Significant constraints and stresses have been in our business. We have had to take some harsh steps to manage the situation. Unlike most companies, we did not cut salaries in the last one and half years. In turn, we have decided to move away from theatrical productions to develop content for OTT. OTT offerings are drastically different in its making than large format films. After wave 2, we have been left shaken. The business model is rejigged; requesting former people to resign or terminate their services after they have been found redundant in the current scheme of things. For all people laid off, complete salaries have been paid to them or are under process. Existing employees could face some delayed salaries, because of vendor payment delays. But former employees have all been paid in full."

Dwivedi emphasises that the studio suffered huge financial losses after Haathi Mere Saathi that was released in Tamil, Telugu and Hindi but couldn't have a run due to the theatre lockdown in March.

Pradeep Dwivedi, CEO, Eros

Reiterating that the payments could also be pending due to logistical delays if the employee hasn't returned company items like access data cards, critical documents et al. "Once all the handover has been completed, it takes 90 days for finance to clear their amounts which we assure we will for every employee past and present."

We specifically ask him about the non-payment of bonus amounts as cited by an employee earlier in the copy, to which Dwivedi says, "Some employees leave unhappy. A particular senior management employee left on a bad note and that's where the non-payment of bonus amounts is coming from. As of July last year, he signed a letter saying he was duly paid by the company. He has withdrawn claims to bonus and ESOPs in his full and final settlement. He had sent us a legal notice to which we have responded. We are initiating legal action on the said employee for defamation (referring to his tweets) to move against the said employee. He is indulging in social media extortion."

Addressing rumours of lack of vendor payments, he says, "It is a chain reaction. From the time the pandemic started till now, we had not let go of a single person. The fact that we have paid everyone internal resulted in some external payments getting delayed. Creative process getting hampered due to cash flow delay is possible. There are some long delays in vendor payments. In some occasions, it could also be a case of work not being completed. The monies being owed to us from distributors, theatre chains is also a factor because the reality is there is no money in the market. The stress is on the economy and it's not fair to single us out."