Producer Bunty Walia booked by CBI in Rs 119 crore alleged bank fraud case, details inside

The CBI has booked film producer Jasprit Singh Walia alias Bunty Walia in a case of alleged bank fraud that caused a loss of more than Rs 119 crore to the IDBI Bank, officials said on Sunday. 

In its complaint, the bank has alleged that GS Entertainment Private Limited (GSEPL) was sanctioned a Foreign Currency Loan (FCL) of USD 2.35 million (then equivalent to Rs 10 crore) and a term loan (RTL) of Rs 4.95 crore in June 2008 under the Film Financing Scheme for the production of Sanjay Dutt, Bipasha Basu-starrer Hindi film Lamhaa on the personal guarantee of Walia and others.

According to the original schedule, the film was to be released in 2009, but it got delayed "seemingly due to a dispute between the promoters and the exhibitors from March 2009", the bank has alleged. The account turned into a non-performing asset (NPA) on September 30, 2009.

Subsequently, the bank appointed PVR as the sole distributor to release the film worldwide, subject to the execution of a suitable tripartite agreement between GSEPL, PVR, and the IDBI Bank, as also a commitment from PVR investing an amount of Rs 8 crore for meeting the necessary expenditure on print and publicity and the completion of the remaining post-production work. The tripartite agreement was executed between the bank, GSEPL, 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 it was Rs 7.41 crore as against the expenses incurred by it on promotion and distribution amounting to Rs 8.25 crore)," the bank has alleged.

A forensic audit showed that the company had submitted a "fraudulent utilisation certificate", diverted the bank funds and fudged account books, the bank has alleged. It has 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 agency has named Walia, GSEPL, and others under the Indian Penal Code (IPC) sections related to criminal conspiracy, cheating, and forgery as well as provisions of the Prevention of Corruption Act.

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