Ashtavinayak scam: EOW arrests 3 exec directors of production firm

The Economic Offences Wing (EOW) of the Mumbai police arrested three executive directors of Ashtavinayak Cine Vision for their alleged role in the Rs824 crore scam involving a cluster of shell companies. The three arrested accused had been absconding for the last six months.

The Economic Offences Wing (EOW) of the Mumbai police arrested three executive directors of Ashtavinayak Cine Vision for their alleged role in the Rs824 crore scam involving a cluster of shell companies. The three arrested accused had been absconding for the last six months.
According to EOW officials, the accused have been identified as Rupen Amlani, Dhaval Jatania and Hiren Gandhi. "The three had been on the run since the case was registered. Finally, we received concrete information that they were coming to Mumbai and we nabbed them," said an EOW officer.
"The trio signed on documents as executive directors of the three shell companies floated by Ashtavinayak Cine Vision to show black money as white."
The trio has been remanded in police custody till May 16. Till date, the EOW has arrested 12 people in the case.
A complaint was registered against the directors of Ashtavinayak Cine Vision on the basis of a complaint lodged by a shareholder of the company — film financier Tejpal Shah. Shah had alleged that in 2007 he was to receive Rs41 crore from Ashtavinayak for some production work that he had carried out for it. Shah approached the high court when Ashtavinayak failed to give him his dues. On the direction of the court, the company then issued Shah a cheque, which bounced. The company then paid him Rs4.5 crore hoping to settle the matter.
Shah, however, filed a case under the Negotiable Instruments Act and also moved the Company Law Board (CLB). The CLB, after scrutinising documents, unearthed a bigger scam and appointed former bureaucrat Sharad Upasani to probe the case. Upasani's probe revealed that Ashtavinayak had formed five companies in India to produce and distribute films and had disbursed Rs380 crore to them. It had also created a subsidiary in Dubai for the same reason and remitted Rs444 crore to it. In all, investigators said, the company had diverted Rs824 crore.
"When no movie was made by the subsidary companies, Ashtavinayak did not make any inquiries and took no action, which is what raised suspicion," said an EOW officer. "CLB then asked us to probe the case and Shah approached us with a complaint, following which we registered a case."