The real Dirty Picture of Bollywood came to light when a sting operation carried out by the IBN Cobrapost, exposed the investment of black money in the film industry.
The Cobrapost-IBN Network titled 'Expose of Bollywood's Black Money Business Model' revealed that how black money is being invested in films and how top filmmakers and directors are approaching investors who want to launder their black money.
The producers like Anubhav Sinha, Vashu Bhagnani, Anees Bazmee are among those, who were captured on the camera by the Cobrapost-IBN Network Investigation.
Anubhav Sinha, who is one of the biggest successful filmmakers, has put a big space for the investors, who are laundering their black money. Sinha, who has directed the most expensive film 'Ra One', is the king of music videos. But all his films have been made with the investment of black money. He takes the credit for the film, but the ghost investors are the real men behind the success. However, their names are not mentioned on film posters or even hoardings.
Vashu Bhagnani, who takes the credit for the films like 'Coolie No 1', 'Bade Miyan Chhote Miyan', 'Do Knot Disturb' and 'Faltu', is another face caught on the secret camera.
The much-celebrated director Aneez Bazmee and writer Rajiv Kaul are not clean in the industry. The expose showed how they were accepting cash for films.
We can recall the Wikileaks cable on Bollywood and black money, which had hinted at the black money investment in Hindi film industry. It had said that Bollywood has been associated with the Mumbai underworld. It welcomes funds from gangsters and politicians. It had also said that the films are financed by ghost investors; many are from the construction and trade firms, with high interest rates.
The WikiLeaks's drafts appear to be true and the real picture of the film industry was finally unmasked.
Here is the complete conversation of Bollywood's top producers with the IBN Cobrapost's under cover reporter. The expose will show how they attract investors by promising to convert their black money into white.
Anubhav Sinha
Sinha: I can assure you that if you put 5 rupees in say two films…then I'll definitely make 6 of the 5 in one year.
Reporter: ok, ok
Sinha: And after the success of the film - you get a profit of 10 per cent or 11 per cent
Reporter: Profit sharing - Yes, yes that's what I want.
Sinha: Yes but it mostly happens that people invest but their name doesn't come even on the posters of the film so in your case also we should do something like that since you are so secretive.
Reporter: It's better to be safe
Sinha: Yes if anyone asks me from where it's come…I won't tell anyone. I meet a lot of people who want to invest in my company…they never lose money.
Sinha: Now tell me how much amount are you comfortable with to invest
Reporter: You tell me sir…I think I want to start with 15…and in that how much of black or cash do you want and how much white?
Sinha: Can you give 50 per cent by check
Reporter: No sir, we can't give more than 25 per cent by check
Sinha: Hmmm....
So, the deal would involve only 25 per cent white money… the rest all black. And as emphasized by Sinha himself, the investor would be a 'ghost investor' with no mention of his name either on film posters or even hoardings. The deal now goes to the next level where our undercover reporter is taken to meet Sinha's chartered account.
Sinha: You can ask him all the questions - (points to the CA)
Middleman: I am the coordinator - I'll just explain… these people mostly have cash and want to do a contract that is 80 per cent by cash and 20 per cent by check.
Reporter: Or 25 per cent 75 per cent
CA: There are lots of expenses in films where we need cash…so we can put the money there and return it by cheque
Sinha and his associates make it clear – it's easy to exploit the film industry to convert black money into white. The black money is used to cover unaccounted production costs, even under-the-table actor fees. The investor later paid back in check from the film's profits. And top directors like Sinha who aid this process take their cut from the investor's profits.
Vashu Bhagnani
Bhagnani: I have many ways to make black money white...but the person needs to be genuine. We should not get caught by income tax officials.
Reporter: So if I have to give you 10 crores, how much in check and how much in cash?
Bhagnani: 8 crores cash and 2 crores check…the paper work will be there only for 2 crores.
Bhagnani: For the case we'll give you distribution rights of the film for 3 states.
Reporter: So we'll start a company to deal with you
Bhagnani: Then we'll do an agreement with you that is similar to what's going on for the past 50-60 years, after you recover your initial investment…whatever profit comes we'll take 50-50…PATCH and you’ll get your money in check.
Bhagnani: So on release when you get your money…you can give me cash…no need for any paper work and you're also the distributor of the film.
The deal Vashu Bhagnani offers is simple – the investor buys the distribution rights of a film, paying mainly in cash or black money. On paper, these distribution rights are sold for a much lower amount. After the film's release, the investor claims the box office returns as 'clean' or white money. Bhagnani benefits from the deal by getting a 50 per cent share of any profit that is made.
Vashu Bhagnani in fact made a direct offer to our undercover reporter – saying he could buy the all India distribution rights of his upcoming films for a sum of 100 crore rupees.
Bhagnani: On 13th I'm starting a film 'Ajab Gajab Aur Love' – there is Jackie, Kiron Kher, Sanjay Arshad Warsi and Arjun Rampal
Bhagnani: For 100 crores I'll give you rights for 18 films.
Bhagnani: I won't take the money now…I'll tell you the right stage…in installments for the different films
Reporter: Is this a safe way?
Bhagnani: Not just safe…but you'll automatically also become popular. You'll also work with other filmmakers. I think by this method your money becomes white and you also get the perfect value.
Anees Bazmi and Rajeev Kaul
Location: Juhu hotel, Mumbai
Time: 2 pm
A secret meeting is underway. On the agenda – how to convert crores of black money into white using the Bollywood route. Those present at this meeting are two of commercial cinema's biggest names.
Anees Bazmee, director of mega hits - No Entry, Singh is King and Ready and Rajeev Kaul, veteran writer and the man who scripted big hits like Dil, Beta, Welcome and Ready.
Also present – Cobrapost’s undercover reporter posing as an Investor wanting to launder his black money.
Reporter: Sir our problem is that we have more cash available – more black money – so that's what we want to adjust
Anees: No problem, give as much cash as you want and as much cheque
Rajeev: I've told him (reporter) that you can give some cash now…and the cheque later
Reporter: What's important for us is that the money we are putting through the film business we will be able to convert it to white.
Rajeev: I've told you that we'll get in a corporate to join us and that way it will be easy for you
Reporter: Anees saab what will your advance be?
Anees: 5 crores - 4 crores - I crore by cheque
Reporter: So for all the cash we are paying…will we get something in written?
Anees: How is that possible?
Reporter: No something - some authenticity
Anees: When we buy a flat – if its 10000 per square ft we give cash 4000 and on agreement it's just 6000 per sq ft.
Reporter: Yah but that's property
Anees: It's exactly similar to the property business.
Anees Bazmee explains that black money plays the same role in the film industry and in real estate. He says up to 60 per cent of the money invested in a film is black money. Just 40 per cent is legal white money. Bazmee also hints at how in spite of corporate money now coming in, black money continues to play a big role in financing films… as writer Rajeev Kaul explains in detail.
Reporter: 30-35 crores of our will be in black
Rajeev: Yes, you can keep investing both black and white together. With both the black and white we'll have about 40
Reporter: hmmm
Rajeev: For the rest of the 20 we'll rope in a corporate and the corporate will give us the payment through white…so our money will get white also and we’ll get profit as well.
Reporter: Okay
Rajeev: So the advantage will be that the corporate will release it…and also get the white funding.
Reporter: So no tension
Sandeep Marwah
Sandeep Marwah runs a film institute and studio in Noida's Film City. He assured Cobrapost's undercover reporter that using his family relations with Boney Kapoor and Anil Kapoor he could finalise a film project with them in which black money could easily be put to use.
Marwah: I can speak to Boney this evening itself… he is the one who handles all the production but you need to tell me a bit about yourself
Reporter: I'll do one thing sir…I'll tell my CA to register a company…and we can use that company name to work with you.
Reporter: We don't know much about movies…we will do as you advise…but in terms of the payment…we will do 90 per cent in black and only 10 per cent in cheque…
Marwah: No problem… But to begin with – you must pay off 5-10 lakhs asap…so we can proceed with the project
Reporter: ok ok
Sandeep Marwah, veteran producer of around 70 films, confirms on camera that black money is common currency in the film business. Our next stop – a hotel in Juhu, Mumbai.
Marwah reacts to the sting operation: "Corporatisation has ensured that black money is not involved in films."
Meet Shailesh R Singh, producer of films like 'Tanu Weds Manu' and 'Bas Ek Pal' – right now finalizing a black money deal with our undercover reporter.
Reporter: How much cash and how much by check? How much of black will you take?
Shailesh: Even 80 per cent cash will do?
Reporter: How much will we have to give Irfaan?
Shailesh: We'll have to give him 25 lakhs at least as the signed amount – white
After claiming that he would sign Irfaan Khan for his film, he goes on to tell our reporter that actors too, prefer to be paid more in black money than white, also confirming the terms of their money laundering deal.
Reporter: But how much will he take by cash?
Shailesh: At least 1.5 crores…that you can give full cash - no tension
Reporter: No problem
Shailesh: He prefers cash…
Reporter: So the money that we invest say – 15 crores – how will we get it in return?
Shailesh: You want a cheque right? We'll give you a check…and you can register profit and pay tax.
Reporter: And how much profit per cent will I get
Shailesh: Whatever I get – you'll get 1/3rd of it – 35 per cent
Shailesh Singh also claims that liquor Baron Ponty Chadha – recently under the scanner of the Income Tax Department had invested in his previous film – Tanu Weds Manu - as a distributor.
Reporter: Is that what happened in Tanu Weds Manu as well?
Shailesh: Ponty Chadha had invested in the Delhi, UP theatres.
Shailesh: got bonus (profit im guessing)
Reporter: So Ponty Chadha got the profits by cheque…that must be white money…
Film Producer Shailesh Singh confirming on camera yet again... that film financing is indeed a safe route for money laundering... the transaction benefiting the investor… and the film producer.
Shailesh Singh chose not to respond to the allegations.
Payal Rohatgi, Sangram Singh and Arti Chhabria's parents
Payal Rohtagi, who was the guest appearence in the films like 'Corporate', 'Heyy Baby' and '36 China Town', was also captured on hidden camera. Cobrapost's undercover reporter met them posing as a film financier, looking to sign the couple as lead actors. When the discussion for payments begin, Payal is clear that she expects to be paid mainly in black!
Reporter: We've spoken about 30 lakhs as payment – how do you want it? – How much in black i.e. cash?
Payal: We just want 5 lakhs in check
Reporter: So 5 lakhs in check and 25 lakhs cash?
Reporter: But last night you mentioned something about 25 per cent?
Payal: No what I meant is 25 lakhs cash and just 5 lakhs in cheque.
Sangram and Payal expect to be paid 30 lakhs each, but only 5 lakh each on paper. Payments in black seem routine in Bollywood.
Reacting to the sting operation, Rohatgi said: "There is nothing called black money in the industry today."
It's the same story at the residence of actor Aarti Chabbaria – seen in films such as 'Shootout at Lokhandwala', 'Partner' and 'Shaadi No 1'. Our undercover reporter is there to offer her a role in a film… he is met by her parents Dr Ashok and Sunita Chabbaria.
Sunita: We mostly take Aarti's payments half white – half black
Reporter: Increase the ratio (of white?) a bit?
Sunita: Ok we can do 60-40
The Chabbaria's also explain how the cash or black money deals are conducted…
Dr Ashok C: The agreement will be in white only
Reporter: So what about the black? What is the guarantee on that…
Dr AC: That will be a temporary agreement once the money is received and the deal is done…we'll tear it up
Reporter: Tear it up? Ok
It's an illegal but mutually beneficial deal. In what remains a largely unorganized business unaccounted or black money is clearly the preferred currency in which to do business in Bollywood!
Aarti Chabbaria chose not to respond to the sting operation. While lawyer Mahesh Jethmalani said: "It's a wonderful expose. Film industry should not be singled out. Black money is so endemic that nobody turns away anybody."
