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COVER
STORY: CRIME
Shah,
the Smiling Santa
Shah
was both a smiling Santa Claus handing out the goodies and a shrewd businessman
with an eye on the prize. When J.P. Dutta approached him for help, Shah
overlooked his dismal track record - Dutta had three flops behind him
- and recognised his talent instead. He gave Dutta the seed money - Rs
2 crore - to start the ambitious Border. He also invested Rs 22 crore
in Raj Kumar Santoshi's starless, songless Seven Samurai remake, China-Gate.
But he was not doing it for charity. In return, he often took the world
rights of the film, or retained the most lucrative territories for himself
or companies that he had an interest in. If the loan wasn't returned,
Shah usurped the negative of the film. For the maker, it was a Faustian
bargain.
 |
| Shah
always maintained a proximity with the powers that be. Seen here with
Chief Minister Vilasrao Deshmukh. |
At the time
of his arrest, Shah had over Rs 125 crore invested in 11 films. What happens
to these projects? "We are still standing by our commitment,"
says Shah's son Rajiv, "and films will be completed within the given
schedule." But Bollywood isn't so sure. There will be a cascading
effect on the economics of the film industry. Says Film Information's
Komal Nahta: "There might be serious shortage of cash, film output
and export earnings. Employment will fall."
The impact on Dalal Street was immediate with panic selling in media and
entertainment stocks hitting an 8 per cent lower circuit for three days
in a row. The diamond industry in which the Shahs have been key players
for the past 15 years was less affected. To show solidarity, the all-India
diamond market observed a one-day bandh that resulted in a loss of Rs
100 crore. Says Sanjay Kothari, chairman of the Gem and Jewellery Export
Promotion Council: "The bandh was in respect of Bharatbhai's remarkable
contribution to the industry."
Little about
Shah's beginnings suggest that he would rise to be a man of such seismic-causing
stature. The third son of Palanpuri diamond trader Shantilal Lalubhai,
Shah dropped out of college in 1971. Instead of joining his father's diamond
firm, he invested Rs 50 lakh and set up B. Vijaykumar with his brother
Vijay. In 1977, Vijay relocated to Antwerp and went his own way. Shah
wasn't deterred. In eight years, he became India's largest exporter of
diamonds.
But Shah
wasn't one to rest on his laurels. In 1980, he jumped into the construction
business by setting up Shantistar. The company has constructed nearly
400 buildings on 200 acres of wasteland on Mumbai's Mira Road, besides
developing the plush business premises of Kodak House at Rs 80 crore with
Global Trust Bank in Lower Parel. Shah had also bid for the controversial
Khatau Mill land in the city's western suburbs but the deal collapsed
after Sunit Khatau was shot dead by Gawli gang members in 1993.
Films were a passion since Shah's youth. In 1963, when he was a teenager,
he organised the premiere of the Meena Kumari-starrer Dil Ek Mandir. In
1977, he started investing small sums in films. But his name shot into
prominence with Raj Kapoor's Ram Teri Ganga Maili, which he financed and
distributed. The grapevine goes that Shah's family didn't approve. Says
an insider: "His brothers always said, 'Aapko photo khichwane ka
kitna shauk hai?'" For Shah, however, Bollywood was a potent mix
of power, limelight and business. Says a close friend: "Shah is not
wealth crazy but he gets a high when he is appreciated. He likes to be
helpful."
Slowly,
Shah's profile grew 70 mm. In the late 1980s, he hit the society pages
when he placed a bid of Rs 10 lakh for an M.F. Husain painting at a Sotheby's
auction in Mumbai. In 1989, he had a replica of a Rajasthani palace erected
at the Wankhede Stadium for his daughter Reshma's wedding. The extravagant
ceremonies lasted seven days and are rumoured to have cost Rs 30 crore.
In 1994, when the King of Belgium made Shah a Knight of the Order, he
flew to Antwerp in a chartered plane. For his son Rashesh's wedding in
1997, Shah had a lavish set constructed at Vallabhbhai Stadium. He has
also helped Shah Rukh Khan buy a sea-facing bungalow in Bandstand which
is said to have cost Rs 13 crore and brought Michael Jackson to India.
At a charity function after Jackson's concert, he bought Jackson's autographed
pillow for Rs 3 lakh.
Shah has
always maintained a proximity with the powers that be. In 1999, he financed
Smita Thackeray's Haseena Maan Jayegi. Shah's arrest is being seen in
some quarters as a political vendetta. But Maharashtra Home Minister Chhagan
Bhujbal denies this: "No one is above the law. We have evidence about
his links with the mafia."
According
to intelligence reports, Shah's alleged liaison with Dawood goes back
to the 1980s. The common platform: hawala dealings. But an actual relationship
started with a property dispute involving the late smuggler Yusuf Patel,
Dawood and a third party. Shah apparently helped sort it out and was rewarded
with a prime property at Chowpatty that belonged to Patel. The relationship
grew with several land dealings, mainly Shah's Mira Road projects. One
of his partners who was unhappy with the dealings complained to Dawood.
But the don is said to have told him that Shah was acting on his behalf.
The partner was shot down by the Gawli gang in 1997.
D-Company
is suspected to have joined hands with Shah in the film business after
1995. Intelligence reports allege that the two have worked together on
at least a dozen projects. Currently various investigative agencies, including
the Customs, the Enforcement Directorate, the Director of Revenue Intelligence
and Income Tax, are looking into Shah's businesses to check if they were
just a platform to launder mafia money. After the raids on his premises,
Shah's bank accounts have been frozen and his records, particularly his
borrowings against export from certain banks, are being examined. Shah
is said to owe over Rs 500 crore to these banks even as several of his
accounts show non-performance status. Ironically, the police had provided
him protection in 1997 after he complained about extortion calls. He maintains
that beyond these calls, he has never had any dealings with the mafia.
Shah's record,
however, doesn't appear to be spotless. In 1999, a former partner in a
company called B.V. Jewels took him to court with allegations of cheating.
On November 19, he applied to dissolve the company. The partner's grouse
was that on October 13 Shah clandestinely transferred Rs 15 crore out
of the company's joint account into his brother's company, Vijaydiamond,
in Antwerp. Shah also demanded rights to jointly owned property. The case
is pending but in the interim hearing, Justice Lodha rejected Shah's demand.
Shah's B.Vijaykumar
Chhattisgarh Exploration Company (BVCE), a joint venture with the Madhya
Pradesh Government, has also come under scrutiny. BVCE, it is alleged
won the contract to explore diamonds in the Deobhog region, in an open
global tender, through political influence and bribes. There is also a
fear that BVCE has excavated and exported more material than the 10,000
kg that the company is legally permitted to.
Meanwhile,
the Mumbai Police have also raided the premises of leading financiers
Jhammu and Harish Sughand and summoned them for questioning. Says Police
Commissioner M.N. Singh: "Our aim is to free the film industry from
the underworld. We want to send out a clear signal that no one will be
spared if we find evidence of them having any connection with the gangs."
The Crime Branch will also question producer Bobby Anand, actors Salman
Khan, Shah Rukh Khan, Sanjay Dutt, Preity Zinta, Rani Mukherjee, producer
Mansoor Siddiqui and director Sanjay Gupta. In a curious coincidence last
week, the Kolkata Police arrested a Dawood hitman, Abdul Rauf Daud Merchant,
who confessed to having killed T-Series owner Gulshan Kumar in Mumbai
in 1997 under orders from Dawood and Shakeel.
A case as
complicated as Shah's will take months to unravel. For Bollywood, the
immediate prospects seem gloomy but there is the proverbial silver lining
to the cloud. Pundits are hopeful that the cleansing operation will eventually
lead to more legitimate sources of funds and increasing corporatisation.
Shah's arrest has also sent a strong message down the ranks in Bollywood.
Everyone - from directors to stars - will think twice before signing on
with unknown entities and, hopefully, only the genuine makers will thrive.
Says a leading star secretary: "Safai ho rahi hai, achha hai."
Indeed.
As Trade Guide Editor Taran Adarsh puts it, "Films were made even
before Bharat Shah came into the industry. After him too, people will
continue to make films." The show will go on but the stains will
not wash away in a hurry.
-with
inputs from
Neeraj Mishra and
Uday Mahurkar
Pg.1
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