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Investigations involving Ashtavinayak Cine Vision Ltd reveal 5 bogus firms: Report

MUMBAI: As the investigations into the alleged Rs 824 crore (Rs 8.24 billion) cheating case involving the directors of Bollywood production and distribution firm Ashtavinayak Cine Vision Ltd gets deeper, more murkier details are being revealed by the police.

The investigations have revealed that the directors had floated five bogus firms and appointed their clerks and even a clerk’s wife as directors of these bogus firms, The Times of India reported. In fact, an amount as high as Rs 296 crore (Rs 2.96 billion) was also deposited in these firms.

Last month, the city economic offences wing (EOW) arrested Dhilon Mehta, managing director of Ashtavinayak, and his father Harshad Mehta. Eight people have been arrested in the case so far.

EOW joint commissioner Dhananjay Kamalakar told TOI, “It’s a lengthy investigation and we are going in the right direction. Those found involved will be dealt with strictly.”

The complainant Tejpal Shah told police that the firm’s directors raised funds for their business, cheated shareholders and siphoned off funds. The police said that the accused raised funds in India and abroad to make films.

Shah himself is a film distributor and possessed distribution rights of some of Ashtvinayak films. Ashtvinayak has produced Hindi movies like ‘Jab We Met’, ‘Bol Bachchan’ and ‘Golmaal’.

The complainant, who was to receive Rs 41 crore (Rs 410 million) from Ashtavinayak, got cheques. While cheques of Rs 5 crore (Rs 50 million) were honoured, cheques amounting to Rs 36 crore (Rs 360 million) bounced. He approached the court and the company law board after the firm refused to return his dues. The committee formed by the law board found the firm had raised funds through foreign equity convertible bonds. The case was referred to the EOW and an FIR was registered in September 2014.

TOI quoted an officer saying that after raising money in India and abroad, the accused directors floated five fake companies and appointed their clerks, bamboo supplier, godown keeper and a clerk’s wife as director of these firms. The money was then diverted into the firms.

“So far we have found Rs 60 crore (Rs 600 million) was diverted to Suyujit Enterprizes, Rs 16 crore (Rs 160 million) to Century Pictures, Rs 79 crore (Rs 790 million) to E-Force India Ltd, Rs 95 crore (Rs 950 million) to Armaan Enterprizes and Rs 45 crore (Rs 450 million) to V K Entertainment. The employee-directors are all from Rajkot and Ahmedabad. Their statements have been recorded before the magistrate and will be used as evidence against the accused,” the officer said.

In their statements, the directors of the fake companies allegedly told cops they were paid between Rs 15,000 and Rs 20,000 to sign the papers.

The report added that the accused said the five firms had been financed to make films and even made agreements with these companies. Meanwhile, a subsidiary firm, Ashtvinayak Cine Vision FZE, was floated in Dubai. It did agreements with international firms for film production and FZE paid Rs 444 crore (Rs 4.44 billion) to the international firms for this purpose.