CBI Cracks Down on Film Producer Bunty Walia for Rs. 119 Crores Bank Fraud Case
The Central Bureau of Investigation (CBI) of India has filed a case against film producer Jasprit Singh Walia, better known as Bunty Walia, for allegedly defrauding the IDBI Bank of more than Rs. 119 crores (about $16 million). Walia is the producer of the 2010 Bollywood movie “Lamhaa”, starring Sanjay Dutt and Bipasha Basu.
The loan and the delay
According to the CBI, Walia’s company GS Entertainment Private Limited (GSEPL) obtained a Foreign Currency Loan (FCL) of USD 2.35 million and a term loan (RTL) of Rs. 4.95 crores in June 2008 from the IDBI Bank under the Film Financing Scheme for the production of “Lamhaa”. The loans were secured by the personal guarantee of Walia and others.
The movie was supposed to be released in 2009, but it got delayed due to a dispute between the promoters and the exhibitors. As a result, the account turned into a non-performing asset (NPA) on September 30, 2009.
The tripartite agreement and the losses
In order to recover the loan amount, the bank appointed PVR as the sole distributor to release the movie worldwide, subject to a tripartite agreement between GSEPL, PVR and the IDBI Bank. The agreement also required PVR to invest Rs. 8 crores for meeting the expenses on print, publicity and post-production work.
The agreement was executed on June 2, 2010 and the movie was released on July 16, 2010. However, the movie failed to perform well at the box office and PVR claimed that it incurred losses of Rs. 83.89 lakhs. The total revenue collected by PVR was Rs. 7.41 crores as against the expenses of Rs. 8.25 crores.
The forensic audit and the fraud
The bank conducted a forensic audit of GSEPL’s accounts and found several irregularities and discrepancies. The audit revealed that GSEPL had submitted a fraudulent utilisation certificate, diverted the bank funds for other purposes and fudged its account books.
The bank accused GSEPL of committing fraud, cheating, manipulation of records, misappropriation of public funds, misrepresentation and criminal breach of trust that resulted in the declaration of the loan as fraud.
The CBI case and the charges
The CBI registered a case against Walia, GSEPL and others on May 29, 2023 under various sections of the Indian Penal Code (IPC) related to criminal conspiracy, cheating and forgery as well as provisions of the Prevention of Corruption Act.
The CBI is likely to conduct raids at the premises of Walia and others and collect evidence related to the case. Walia has not issued any statement or comment on the matter so far.
This is not the first time that Walia has been involved in a controversy. He was earlier accused of assaulting a police officer in Mumbai in 2017 and was arrested for allegedly creating ruckus at a hospital in 2018.
