The Enforcement Directorate (ED) has summoned renowned Indian actor Prakash Raj for questioning in an alleged money laundering case worth Rs 100 crore. The case is linked to a ponzi scheme run by Tamil Nadu-based Pranav Jewellers, for which Raj had been a brand ambassador.
ED Raids Reveal Cash & Gold
The ED case is based on an FIR filed by the Tamil Nadu Police Economic Offences Wing against Pranav Jewellers, located in Tiruchirappalli, for allegedly collecting Rs 100 crore from investors under the pretext of a gold investment plan promising high returns.
Last week, the ED raided the premises of Pranav Jewellers and seized unaccounted cash worth Rs 23.70 lakh along with 11.60kg of gold jewellery. The agency said Pranav Jewellers failed to return investors’ money and instead diverted funds to shell companies.
Prakash Raj’s Role Under Scanner
Prakash Raj had promoted Pranav Jewellers as its brand face for several years through advertisements across media platforms. The 58-year-old National Award winning actor has been asked to appear before the ED investigators in Chennai next week for questioning about his association with the jewellery group accused of swindling crores through a ponzi-like scheme.
The versatile actor, also known for his outspoken political commentary against the ruling BJP government, has featured in numerous Hindi, Tamil, Telugu, Malayalam and English films over a career spanning more than 25 years. The ED will examine whether Prakash Raj was aware of the alleged fraud run by Pranav Jewellers or was himself a victim of false assurances by the owners.
Shell Firms Reveal Bogus Gold Purchases
According to the ED probe so far, Pranav Jewellers had been showing fake gold purchases from various shell companies to cover up the funds raised from the public through the investment plan. Statements recorded from owners of some shell firms revealed Pranav’s bogus bills and invoices to account for gold stock arriving in its books without actual procurement.
The money trail indicates part of the collected funds was routed back to the jeweller’s representatives through these shell entities in the guise of business expenditures. The ED is investigating whether Prakash Raj or his family members also benefitted from such transfers as quid pro quo for his branding endorsement deal with Pranav Jewellers.
Previous Instances of Misusing Celeb Faces
This is not the first instance of investors being duped by a firm using celebrity endorsements for fraudulent money pooling schemes and earning public trust.
In the recent past other ponzi schemes like Q-Net and I-Monetary Advisory (IMA) have also come under the regulatory scanner for illegally raising thousands of crores roping in famous personalities to promote their illegal activities.
Regulators Struggle to Contain Fraud
The Prakash Raj-Pranav Jewellers case highlights the struggles regulators face in containing fraudulent investment schemes in the absence of strict due diligence by celebrities before lending their brand value. Tighter norms are needed for celeb brand endorsements and audits on their compensation deals to prevent the common public from being cheated by operators misusing the credibility of famous personalities.
As investigations progress, the ED summons could either make Prakash Raj a witness helping unravel the ponzi scam or an accomplice liable for promoting an illegal scheme. The verdict awaits as regulators and investors hope for an impartial and swift investigation.
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