India Markets closed

ED summons Bengali superstar Prosenjit Chatterjee: How Rose Valley scam pushed Tollywood onto a thorny path

FP Staff
In connection with its probe into the multi-crore Rose Valley ponzi scam, the ED has summoned Bengali actor Rituparna Sengupta after sending summons to actor Prosenjit Chatterjee on Tuesday.

After sending summons to actor Prosenjit Chatterjee on Tuesday, the Enforcement Directorate (ED) has summoned Bengali actor Rituparna Sengupta next week in connection with its probe into the multi-crore Rose Valley Ponzi scam.

Sources told PTI that the agency wants to question Chatterjee about the Rs 2.75 crore received by his company, Idea Locations and Production Pvt Ltd, from Rose Valley Group between 2010 and 2011. Of this, Chatterjee is suspected to have received around Rs 23.5 lakh. The probe agency wants to understand the purpose of these funds, the sources added.

With the summons, the alleged nexus between the Rose Valley Group and the Bengali film industry, popularly known as Tollywood, has once again come to light. According to a report in The Economic Times, Bengali film producer Shrikant Mohta was arrested in January, 2019, for alleged links to the Rose Valley Group. The Times of India had reported that the CBI had also arrested actor turned politician Tapas Paul and TMC MP Sudip Bandhopadhyay for alleged links to the group.

The group itself was linked to production houses in Tollywood. Reports indicate that funds raised by the group headed by Gautam Kundu were put into Tollywood production houses in an effort to turn black money into white. "There is no better place than the film industry to invest black money. These fraudulent players were just using Tollywood as a platform to promote themselves. Along with using the industry, they were using the starts to earn people's trust," The Economic Times quoted Rahul Sinha, BJP national secretary, as saying.

According to The Economic Times, around 35 chit fund companies, registered as producers with the East India Motion Pictures Associations, accounted  for 30 percent of the amount invested into Tollywood till 2015. In their heyday, production houses like Brand Value Communications (owned by Rose Valley Group CMD Gautam Kundu), Tower Group, Gurukul and Rahul Group reportedly invested Rs 300 to 400 crore in the entertainment industry and produced an average of two films each year.

According to the Hindu BusinessLine, the scam broke in 2013 after the SEBI established that the Rose Valley Group was running unregulated 'collective investment schemes' and ordered the group to pay back its investors. After the Saradha scam came to light, the CBI and ED, too, began to investigate similar schemes being run by companies and stumbled across the even bigger Rose Valley Group scam.

Under the pretext of collecting instalments for property purchases or holiday packages, entities affiliated to the Rose Valley Group had allegedly been acquiring thousands of crores from investors in the states of West Bengal, Assam and Bihar. According to News18, the amount raised by the Rose Valley Group was an astounding Rs 60,000 crore, which was in 2,600 bank accounts linked to the group.

With Kundu's arrest in 2015, the scam stood exposed and the money trickling into the Bengali film industry began to dry up. According to Krishna Daga, vice-president of the East India Motion Pictures Associations, "As and when these companies came to the lime light for the wrong reasons, they started backing out from film making. Some even left with pending dues. Funds started backing up from their end and their interest in filmmaking, too, took a back seat."

According to a report in The Hindu, the number of films released by the industry per month came down to three from 10. By mid-2016, Brand Value Communications, the production house owned by the Rose Valley Group, cancelled several of its projects amounting to nearly Rs 500 crore.Not only were projects shelved, but budget amounts for existing projects, too, went down substantially.

"From Rs four to five crore a few years ago, it has now come down to Rs one crore or even less," The Hindu quoted Bijoy Majhi, an assistant director, as saying.  The developments related to the scam are touted to have had far-reaching effects on the Bengali film industry. Whereas earlier the production costs were inflated due to the involvement of chit funds companies, film projects are now finding it harder to find investors. Industry insiders rued the fact that investments into the industry were drying up. According to the Federation of Cine Technicians and Workers of Eastern India, the lack of funds due to the withdrawal of Rose Valley Group from the industry has jeopardised the livelihood of nearly 10,000 technicians.

With inputs from agencies

Also See: Rose Valley scam: After Prosenjit Chatterjee, ED summons Bengali actor Rituparna Sengupta in chit fund case

ED summons Bengali actor Prosenjit Chatterjee in connection with Rose Valley chit fund case on 19 July

Bengali star Prosenjit Chatterjee summoned by ED on 19 July in connection with Rose Valley ponzi scam case

Read more on India by Firstpost.