Mumbai: Businessman Raj Kundra has told the Mumbai Police’s Economic Offences Wing (EOW) that his home shopping and online retail venture suffered major financial setbacks due to the 2016 demonetisation, as the company relied largely on cash transactions.
EOW Investigation
The EOW of the Mumbai Police is investigating a ₹60-crore financial fraud case allegedly linked to Bollywood actress Shilpa Shetty and her husband, businessman Raj Kundra. During interrogation, Raj Kundra reportedly told investigators that his business suffered major losses due to the demonetisation policy.
He explained that his company dealt in electrical and household appliances but was severely hit after the demonetisation drive, resulting in a financial crisis that left the firm unable to repay borrowed funds.
Statements Recorded
EOW officials questioned actress Shilpa Shetty for nearly four and a half hours in connection with the case, while Raj Kundra’s statement was recorded for the second time. Officials said Kundra is likely to be summoned again in the coming weeks for further questioning.
Last week, an EOW team of four to five officers visited the residence of Kundra and his wife, actor Shilpa Shetty, to record their statements in the alleged ₹60 crore cheating case. The recording lasted nearly four hours.
Shetty’s statement was also recorded as she was a signatory of Kundra’s firm, Best Deal TV Pvt Ltd, a now-defunct home shopping platform. Kundra’s first statement was taken on September 15, and he later agreed to provide additional clarifications, a senior officer said.
Financial Details of Business
According to the EOW, Kundra stated that over ₹20 crore had been spent on advertising and another ₹20 crore on operations and staff salaries. However, the sudden demonetisation move severely hit the business, which primarily ran on a Cash-on-Delivery model, leading to steep losses as customers lacked cash for payments.
Verification of Payments
The officer added, “Kundra revealed that one actor and two actresses featured in the firm’s ads. He has submitted related documents, and their payments are currently being verified. Shilpa Shetty also appeared in a promotional video for the company, but the payment was reportedly not credited to her account. We will be examining her bank records to verify the transactions.”
Case Registration and Allegations
The agency registered a case of cheating against Kundra and Shetty in August, followed by a Look-Out Circular (LOC) in the first week of September to prevent them from leaving the country. The FIR was filed by Deepak Kothari, director of Lotus Capital Financial Services Ltd, a non-banking financial company. Kothari alleged that the couple approached him through loan agent Rajesh Arya, seeking a ₹75 crore business loan at a 12% interest rate.
The FIR stated that the couple, who claimed to be directors of Best Deal TV Pvt Ltd, convinced Kothari to route the amount as an “investment” rather than a loan to reduce tax liability, promising monthly returns and repayment of the principal.
Between April and September 2015, Kothari transferred ₹60.48 crore to the company’s HDFC Bank accounts under two agreements. He alleged that despite multiple follow-ups between 2015 and 2023, the couple failed to return the funds, citing pandemic-related delays.
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Alleged Diversion of Funds
Kothari eventually accused them of diverting the money for personal use, leading to the registration of the case. The EOW investigation into the alleged financial misappropriation is still underway.
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