Indian media mogul Raghav Bahl, Promoter of Network 18 Group that owns a number of TV channels such as CNBC India and CNN IBN, is fighting a group of hedge funds trying to eject him from the board of London-listed production house, The Indian Film Company (IFC). IFC became an overnight success in June 2007 when it got listed on the Alternative Investment Market (AIM) Exchange in the UK. IFC released films such as Jab We Met, Welcome, Singh is Kinng, Golmaal Returns and Ghajini in the last one and a half years.

The trouble in IFC started when UK-based hedge fund,
Altima India Master Fund Ltd , which owns 14.39 per cent in the company, called an Extraordinary General Meeting (EGM) February 5 to oust Bahl, who owns 21.64 per cent in IFC, and Alok Verma from the directorship of the company, alleging poor financial performance and returns.

According to media reports, Altima has moved a resolution to replace the two directors with its own nominees — Atul Setia, a partner in the hedge fund, and Aashish Vyas, who runs his own investment company.

A report, dated January 2009, in Indian paper Business Standard says: The crux of the dispute is that Altima has raised concerns about the company’s poor performance despite big box office hits, as a result of which the returns have been disappointing for investors.

IFC shares, said Altima, were listed on AIM at 100 pence and were trading at 25.5 pence, a discount of 75 per cent on December 22, when the EGM was called, and substantially below the company’s stated Net Asset Value (NAV) of 99.4 pence per share on September 30.

In a statement, Altima Partners’ PR agency Bankside Consultants said the shareholders were also concerned about the financial results the company published, which show that in the first 18 months of operation it produced a total net profit of £3.4 million (of which £2.0 million was earned in interest) on an initial equity capital of £52.8 million (net of issue costs).