Shilpa Shetty and Raj Kundra Issued Lookout Notice in ₹60 Crore Fraud Case

The Mumbai Police started the procedure to issue a Look Out Circular (LoC) against Bollywood actress Shilpa Shetty and her husband Raj Kundra on Friday in connection with a ₹60 crore cheating case.

The decision has been made because of the international travel often undertaken by the couple, said a senior police officer. The LoC is meant for ensuring the smooth conduct of the investigation process, he added.

Mumbai Police's Economic Offences Wing (EOW) filed a case on August 14 against Shetty and Kundra for allegedly cheating ₹60.48 crore. The businessman Deepak Kothari, who is 60 years old, was cheated by the couple along with an unknown person.

The scam case also involves their firm, Best Deal TV Private Limited, which is currently said to be defunct. Kothari claims he lost the money in a loan-cum-investment transaction after he was introduced to Raj Kundra by a common friend.

Kothari, the managing director of Lotus Capital Financial Services Ltd., said that the company owned by Shetty and Kundra requested him to remit the amount as an investment with promises of a monthly return and repayment of the principal. Kothari remitted the amount in two tranches in 2015: ₹31.95 crore in April and ₹28.53 crore in September, both into the bank accounts of Best Deal TV.

In 2016, Shilpa Shetty also stepped down from the company and found insolvency proceedings against Best Deal TV for cheating another investor. Kothari maintained that repeated efforts to recover money did not work and claimed that the money was spent on personal use by the couple.

Mumbai Police have lodged the couple under Sections 403 (dishonest misappropriation of property), 406 (criminal breach of trust), and 34 (common intention) of the Indian Penal Code (IPC).

Advocate Prashant Patil, who is representing Shilpa and Raj, issued a statement refuting all allegations. He termed the payment as an "old transaction," further stating that the company subsequently ran into financial trouble and engaged in protracted litigation at the NCLT.

"There is no criminality involved and our auditors have submitted all the necessary supporting documents from time to time, as requested by the EOW, including detailed cash flow statements. The investment agreement in question is purely in the nature of an equity investment," Patil said.

He also termed the case "baseless" and "malicious," stating that the company had already received a liquidation order, which was also filed with the police department.