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Bitcoin mania: How Big B and family's $250,000 investment rose to $17.5 mn

Bachchans received 250,000 shares of LongFin following the asset purchase

BS Web Team  |  New Delhi 

Kaun Banega Crorepati, Amitabh Bachchan, KBC
Amitabh Bachchan, Kaun Banega Crorepati

Bachchan, the Kaun Banega Crorepati host, undoubtedly knows how to build his wealth. As mania reaches a fever pitch, the value of a stock by the Bachchan family has risen from $250,000 to $17.5 million in two and a half years. The Bachchans, one of Hindi cinema’s biggest names, had made their first significant equity in an overseas company through the Reserve Bank of India (RBI)’s Liberalised Remittance Scheme (LRS) in 2015. Business Standard reported in 2015 that the father-son duo, and Abhishek invested $250,000 (approximately Rs 1.57 crore) in Tech Pte Limited. Back then, Tech was not very well known. That dramatically changed last week when Meridian's prime asset was acquired by another Meenavalli-backed overseas company just two days after the latter's listing on NASDAQ. “The investments were made through two separate accounts – $150,000 from Amitabh's account, and $100,000 from a joint account belonging to and Abhishek,” Venkata Srinivas Meenavalli, founder and chief executive of Tech, told Business Standard. What magic words like can do In December 2017, it is described as "a technology empowered solutions provider" that offers microfinance using "cryptocurrencies across continents." Thanks to magic words like 'blockchain' and 'cryptocurrencies', the LongFin stock rose more than 2,000% between last Wednesday and Monday, after surging over 2,500% on Friday when the deal to acquire com was announced. "In lieu of their holding in Tech, Bachchans received 250,000 shares of LongFin following the asset purchase," Meenavalli told ET. At Monday's LongFin stock price of $70 a share, Bachchans' holding in LongFin is valued at $17.5 million (which at the current is approximately Rs 114 crore). Bachchan's wealth, investments Bachchan, who was ranked 18th on the Forbes list of highest paid actors in the world last year, with earnings of over $20 million, already holds 3.4 per cent equity in Stampede Capital, a Hyderabad-based equity and currency broking, financial cloud and infrastructure services provider founded by Meenavalli in 1995. RBI had announced the LRS scheme in February 2004 as a step towards further simplification and liberalisation of the foreign exchange facilities available to resident individuals. As per the initial scheme, resident individuals may remit up to $125,000 per financial year for any permitted capital and current account transactions or a combination of both. Bollywood stalwart Bachchan has starred in more than 150 movies in his 50-year career. madness: Small-cap Longfin soars 2,000% after acquiring company Small-cap financial technology company Longfin (Ticker: LFIN) is the latest example, soaring in volatile trading the last two days after saying it was buying a company, com last week. As a part of the acquisition, Longfin agreed to buy from Enterprises in exchange for 2.5 million shares of the company. Adding to the confusion and volatility surrounding this move is that the filing for the deal notes that Enterprises, which sold to Longfin, is a private Singapore company that is 95 per cent owned by Longfin's CEO and chairman, Venkat Meenavalli. The company's stock closed up 230 per cent on December 15 and was up more than fivefold at one point Monday, bringing its two-day surge to more than 2,000 per cent.

Longfin currently has 44 million shares outstanding, according to MoneyControl. The company had its initial public offering on the Nasdaq on Dec. 13 and is based in New York. It describes itself as a technology company that uses artificial intelligence to deliver financial services for small companies. For its part, com "presents a solution for micro lending and warehouse financing," according to a SEC filing. "It offers Trade and Micro finance in the form of warehouse Coins to the small and medium imports/exports against collateralization of traders warehouse receipts." In 2016, it was the Panama Papers; in 2017 it was the Paradise Papers Bachchan is India’s most venerated actor with a career spanning five decades. While most of Bachchan’s wealth is from his movies, according to Forbes magazine, the revealed the actor’s other business interests. Last year, the 75-year-old was linked to shipping companies in the British Virgin Islands and the Bahamas as their director. The authorised capital of these companies ranged between $5,000 and $50,000, according to the documents, but they traded in ships worth millions of dollars. Bachchan denied any wrongdoings then, suggesting that his name had been misused. “I have paid all my taxes including on monies spent by me overseas…,” he said in a statement. The reveal Bachchan’s involvement with a digital media company set up in Bermuda in 2002 along with other investors. The company was subsequently dissolved in 2005. Bachchan has faced flak for his financial dealings in the past, too. In 1999, his firm ABCL Ltd, which produced films such as Mrityudand and Major Saab, racked up losses of over Rs 70 crore. A legal battle ensued with his creditors, including large public banks. It took the success of the television quiz show Kaun Banega Crorepati for Bachchan to finally pull himself out of debt.

First Published: Wed, December 20 2017. 10:19 IST