CBI registers FIR against 'Lamhaa' movie producers over alleged bank fraud

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Central Bureau of Investigation (CBI) has registered FIR against directors of GS Entertainment in an alleged bank fraud case. The persons identified as accused in the FIR were directors of GS Entertainment Pvt Ltd (GSEPL) Jaspreet Singh Walia (alias Bunty Walia) and Guneet Singh Walia (alias Jassi Walia). It also mentioned the name of Stany Saidanha, chartered accountant and others.

The FIR reads that IDBI Bank has filed a complaint related to the fraud, misappropriation of funds and criminal breach of trust, by GS Entertainment Pvt Ltd. GSEPI was sanctioned assistance of a Foreign Currency Loan (FCL) of USD 2.35 mn (then equivalent to Rs 1000 lakh) and a Term Loan (RTL) of Rs 495 lakhs in June 2008 under the Film Financing Scheme for the production of the Hindi film "Lamhaa" directed by Rahul Dholakia with lead actors Sanjay Dutt, Bipasha Basu and Kunal Kapoor as the star cast.

As per the original schedule, the film was to be released in May 2009. The film's release got delayed seemingly due to a dispute between promoters and exhibitors in March 2009. Consequently, the account turned NPA on September 30, 2009. Since GSEPL failed to release the film "Lamhaa" IDBI Bank had taken the initiative by releasing the film by appointing PVR Pictures Pvt Ltd. (PVR), as the sole distributor for the release of the film worldwide, subject to the execution of a suitable tripartite agreement between GSEPL, PVR and IDBI Bank, as also a commitment from PVR investing an amount of Rs 800 lakh for meeting necessary expenditure on print and publicity and completion of the balance post-production work.

A tripartite agreement was executed between the Bank, GSEPI, and PVR on June 2, 2010. However, PVR failed to honour its commitment as it had supposedly incurred losses of approximately Rs. 83.89 lakh (total revenue collected by them was Rs. 741.91 lakh as against expenses incurred by them on promotion/distribution amounting to Rs 825.80 lakh), further reads. Forensic Auditor in its report dated June 18, 2020, mentioned that GSEPI has failed to comply with the major terms of sanction related to the infusion of promoter's contribution and arranging funds from distributors of Rs 1495 lakh as envisaged in the project cost of Rs 2990 lakh.

GSEPL has submitted fraudulent utilization certificates from its Statutory Auditors (Stany Saldanha, who happens to be a Statutory Auditor of the GSEPI, since 2008), based on which disbursements were made by the Bank Chartered Accountant (Stany Saldanha) certified that the promoters contribution were brought in as indicated in the utilization certificate which was not routed through the designated bank account of IDBI Bank.

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