Gurugram Court Orders 2 FIRs Against PVR Cinemas For Alleged Fraud

The FIRs against PVR Cinemas and its promoters are for allegedly selling stocks at an inflated value of Rs 820 crore

File image of cinema-goers wearing 3D glasses watch a movie at a PVR Multiplex in Mumbai.

(Photo: Reuters)

The Gurugram judicial magistrate on Tuesday ordered the district police to file two FIRs against PVR Cinemas and its promoters for allegedly selling stocks at an inflated value of Rs 820 crore illegally, thereby causing a loss to Gurugram-based real estate companies.

The complaint, filed by Elan, a realty group, alleged that PVR entered into MoUs with builders of commercial spaces after promoter Ajay Bijli made sensational statements to the press that PVR was in the process of achieving its target of 1,000 cinema screens by the year 2018, thereby inflating the share prices of PVR based on false statements.

Once PVR sold its 14% stake (by overpricing) to Warbur Pincus (a US based fund), PVR fraudulently terminated the MOUs.

The complaint

In response to Elan's statement, PVR said it is seeking legal advice with regard to the order passed by the judicial magistrate.

In a regulatory filing, the company said the allegations made by Elan are “incorrect and baseless" and have been made with the sole intention to malign PVR and tarnish its image.

The multiplex operator said it was forced to terminate the MoU after Elan group had misrepresented facts. “A civil dispute is currently pending between the parties in this regard,” PVR said, adding that the company is seeking legal advice with regard to the order passed by judicial magistrate, Gurugram.

Elan, however, claimed that after investigations it was found that “PVR never had any intention of taking on lease the proposed multiplex which was to be developed in terms of the aforesaid MoUs.”

It alleged that PVR “hatched a well-planned conspiracy with the malafide intent to lure investors so as to increase the share value and worth”.

(With inputs from PTI.)