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Rajshri Media’s investor sends legal notice for unpaid dues
MUMBAI: Rajshri Productions’ digital entertainment and new media arm, Rajshri Media, seems to be in legal trouble with one of its investors. Emergic Venture Capital, which holds 50 per cent shares in Rajshri Media, has threatened to wind up the company due to non-payment of a loan.
As per a Mumbai Mirror report, EVC has sent a legal notice to Rajshri Media alleging that the company’s head Rajjat Barjatya has not fulfilled promises of good returns on investment and repayment of a loan.
“Our client states that this not only reflects the mala fide intent on part of the company, but further displays that the company does not intend to repay our client’s loan with interest. Our client reiterates that despite the company making profit, is not repaying the loan and is merely giving false assurances,” the notice reads as quoted by the newspaper.
TelevisionPost.com contacted Barjatya for his comment on the issue, who only responded, “The allegations made against us are factually incorrect, malicious, and deceitful. We are in the process of preparing an appropriate legal response to these baseless allegations.”
The report further states that the contentious issue is related to a loan of Rs 5.70 crore (Rs 57 million) by EVC to Rajshri Media between May 2007 and May 2010. The figure was reportedly to be additional to the Rs 5 crore (Rs 50 million) invested by EVC for acquiring 50 per cent share in Rajshri Media.
The loan was supposed to carry an annual interest of 6 per cent and was to be repaid entirely within three years. The low interest rate was fixed based on Barjatya’s personal assurance that it would be repaid. As per the notice, total due now with interest is over Rs 9 crore (Rs 90 million).
The notice has said that after EVC had started sending letters to Rajshri Media in March 2013, it paid only Rs 30 lakh (Rs 3 million) in three instalments of Rs 10 lakh (Rs 1 million) each. Moreover, Rajshri Media has failed to send any response to last few letters sent by EVC in November and December 2014.
EVC has further alleged that while the company is not repaying the loan and interest, it is making various payments to its associate companies including other Rajshri companies like Rajshri Films Pvt Ltd, Rajshri Productions Pvt Ltd and Sargam Pictures Pvt Ltd.
A letter, sent through advocate Hitesh Jain of ALMT Legal, details a list of such expenses totalling over Rs 4 crore (Rs 40 million), alleging that these were incurred by Rajshri Media “without informing or taking prior approval from Rajesh Jain who is EVC’s representative on the Rajshri Media board”.