T-Series, Sa Re Ga Ma among 5 firms under ED lens in money laundering case

The Enforcement Directorate (ED) conducted searches at eight locations across Mumbai, Delhi and Kolkata in relation to a money laundering case against music companies/labels. The searches were conducted in relation to a case lodged against the Indian Performing Right Society (IPRS) and the Phonographic Performance Limited (PPL) in 2015.

Sources reveal that five companies including Universal, T-series, Sa Re Ga Ma and YRF Music (a part of Yash Raj Films) were subjected to searches. In May this year, lyricist Javed Akhtar had also given his statement in the matter in order to help the ED probe into the matter. Akhtar is also among the complainants in the case, along with other artists alleging non-payment of royalties and gross irregularities at the IPRS and PPL. The ED had registered a case against the two entities under Prevention of Money Laundering Act (PMLA) on the basis of these complaints.

The IPRS was formed in 1969 and is a representative body of owners of music including composers (music directors), lyricists (or authors) and the publishers of music (film producers and/or music companies/labels) and is also the sole authorized body to issue licences permitting usage of music within India by any person. It collects royalties on the songs and music being used at public places like restaurants, radio stations, television channels, among others, and then distributed it to the authors/composers and publishers.

The Phonographic Performance Ltd. (PPL) owns and exclusively controls public performance rights and radio broadcasting rights of more than 7 lakh songs (sound recordings) across Hindi, Telugu, Tamil, Bengali, Punjabi, Marathi, Malayalam, Bhojpuri and other Indian languages, including both film and non-film songs. It has more than 250 members, mainly music labels.

In June this year, it was reported that Akhtar may withdraw his complaint against the bodies, but no such thing seems to have happened and a source close to the development confirms that the ED is continuing with the probe, resulting in the searches on Friday.

During the course of the investigation, it was found that office bearers of IPRS had assigned PPL the rights to issue user licenses and collect royalties on a revenue sharing on per song basis. Over time, allegations emerged from the complainants that together with a few officer-bearers of IPRS and one Select Media Holding Pvt Ltd (SMHPL), PPL indulged in criminal conspiracy and cheating by not paying the royalties to the artist/labels.

Additionally, an amount of Rs 13.04 crore was retained by PPL (perhaps fraudulently), which led to non-payment of royalties to members of IPRS. As a result, last year, the ED made an attachment of assets worth Rs 13 crore of PPL, defining it as "the proceeds of crime", in the case. The agency also attached mutual funds worth Rs 70.17 crore of IPRS.

Messages sent to Universal and Sa Re Ga Ma remained unanswered at the time of filing the report.

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