Major tax evasion of Rs 40 cr exposed in Parava Films; Soubin Shahir under investigation

Kochi: Preliminary findings from the IT raids at the Kochi office of Parava Films have revealed a tax evasion of Rs 40 crore, connected to the revenue generated by the film ‘Manjummel Boys.’ The investigation, which focused on the financial dealings of the production company, uncovered discrepancies in reported income. The total revenue from the film, both inside and outside Kerala, is Rs 140 crore. As per IT sources, discrepancies have also been found in the income and expenditure records.

The Income Tax Department’s investigation has revealed that 'Manjummel Boys' is the highest-grossing film in Kerala. The filmmakers earned Rs 140 crore from the film, out of which Rs 40 crore of revenue was concealed. Additionally, there were lapses in filing income tax returns, according to the findings.

Actor, producer, and director Soubin Shahir is expected to be questioned as part of the ongoing probe. Sources from the Income Tax Department have confirmed that the investigation is still in progress, with inspections being conducted at seven locations.

The raid also targeted Dream Big Films, the distribution company for ‘Manjummel Boys,’ where officials found that Parava Films had failed to provide accurate revenue records. The department is now scrutinizing the source of the funds involved and suspects illegal financial transactions with a private financial institution in Kerala. It is believed that the institution provided funds to both Parava Films and Dream Big Films, potentially facilitating illicit dealings.

The raid on Soubin Shahir’s office, conducted on Thursday, is part of a broader investigation into the financial activities of Parava Films. 

ED probes money laundering allegations in film industry

The investigation stems from an earlier complaint received by the Enforcement Directorate (ED), alleging money laundering within the film industry. Following the complaint, the ED initiated inquiries into film production companies. This led to the filing of a case by Siraj Valiyaveettil, a resident of Aroor in Alappuzha, against Soubin Shahir and the producers of ‘Manjummel Boys.’

Siraj, who had invested Rs 7 crore in the film, alleged that he was cheated by the producers of Parava Films. According to his complaint, he was not paid his share of the profits or given a return on his investment. The investigation by the police revealed significant financial fraud. The police collected relevant bank records, which exposed the financial misdeeds, and subsequently filed charges of criminal conspiracy, breach of trust, and forgery against the producers.

Controversy surrounding 'Manjummel Boys'

Initially, the producers of ‘Manjummel Boys’ claimed that the total production cost of the film was Rs 22 crore. However, it was later discovered that the actual production cost was only Rs 18.65 crore. The producers misled Siraj, stating that the first schedule of shooting was completed before filming even began. Despite no money being invested by the producers, Siraj was not refunded his investment.

The investigation report revealed a well-organized fraud orchestrated by Parava Films. The producers had promised Siraj a 40% share of the profits, but despite the film's success, they failed to pay him anything. According to the investigation, Siraj incurred an estimated loss of Rs 47 crore due to the fraudulent activities of the producers.