Raj Kundra Claims Loss in ₹60-Cr Fraud Case After Demonetisation

Businessman and actor Raj Kundra, husband of Bollywood star Shilpa Shetty, has once again made headlines — this time over a ₹60-crore fraud case. Kundra has claimed that his business suffered massive financial losses due to India’s 2016 demonetisation drive, which he says directly impacted the company’s operations and revenues.

The case, which is under investigation, involves allegations of cheating, forgery, and financial irregularities connected to his earlier ventures. Kundra, however, insists that he is being falsely implicated and that his financial struggles stemmed from the government’s sudden move to ban high-value currency notes.

Background

The ₹60-Crore Fraud Allegations

The controversy stems from a complaint filed by an investor group accusing Raj Kundra and his associates of cheating and fraud amounting to over ₹60 crore. The complainants allege that they were promised high returns through investments in a company managed by Kundra, but the payments were delayed or never made.

According to reports, the police registered a case under sections related to criminal breach of trust, cheating, and forgery of the Indian Penal Code (IPC). The investigation is ongoing, and Kundra has been asked to cooperate with the authorities.

However, Kundra has defended himself, stating that there was no intention to defraud anyone, and that the company’s downfall began soon after Prime Minister Narendra Modi’s demonetisation announcement in November 2016.

Kundra’s Statement

“Demonetisation Crashed My Business”

In his official response, Raj Kundra reportedly said that his company faced “an unprecedented liquidity crisis” following demonetisation. He explained that most of their clients and investors dealt in cash and the sudden currency ban disrupted payments, operations, and financial commitments.

“After demonetisation, the entire business model collapsed. Cash transactions came to a halt, and we couldn’t recover the funds owed to us,” Kundra stated.

He further added that the company tried to restructure operations digitally but could not survive the financial blow. As a result, several payments were delayed, leading to misunderstanding and mistrust among investors.

Kundra emphasized that the business collapse was not intentional wrongdoing but an economic consequence of a national policy shift that many small and mid-sized companies also suffered.

The Complainant’s Version

The complainants, however, tell a different story. They allege that Kundra and his partners promised assured returns through a profit-sharing model and later defaulted. According to their version, Kundra misused the invested funds and failed to deliver on business commitments.

One of the complainants said,

“We trusted his reputation and invested heavily. He made big promises but when the time came for returns, there were only excuses.”

Investigators are now scrutinizing bank transactions, business ledgers, and communications between Kundra’s firm and the investors to verify whether the losses were indeed due to demonetisation or a result of financial mismanagement.

Demonetisation and Its Ripple Effect

On November 8, 2016, India’s government announced the demonetisation of ₹500 and ₹1,000 notes — a move that wiped out 86% of the currency in circulation overnight. While the intent was to curb black money and fake currency, the sudden change caused a major disruption in the economy.

Small traders, real estate developers, and cash-based businesses were among the hardest hit. Many companies faced severe liquidity issues, defaults, and layoffs.

Kundra’s claim that his business was among the casualties of demonetisation isn’t far-fetched. Several entrepreneurs at the time reported a massive decline in sales, halted projects, and blocked funds, especially in industries heavily reliant on cash flow.

Past Controversies and Legal Battles

Raj Kundra has often been surrounded by controversy. In 2021, he was arrested in a pornography-related case, accused of producing and distributing explicit content through mobile apps. After spending several weeks in custody, he was released on bail and maintained that he was falsely accused.

Even earlier, his name surfaced in the 2013 IPL spot-fixing scandal, which led to his lifetime ban from cricket-related activities. Though no direct evidence was found against him later, the incident significantly tarnished his public image.

The current ₹60-crore fraud case adds another chapter to Kundra’s legal troubles. Despite that, he remains active in business ventures involving fitness, blockchain, and entertainment.

Industry Reactions

The latest controversy has once again divided public opinion. Some industry figures believe Kundra’s explanation about demonetisation’s impact could be valid, given the widespread disruption it caused. Others, however, question his business ethics and financial transparency.

Economic experts note that while demonetisation indeed hurt many sectors, strong corporate governance and digital adaptation helped some businesses survive — suggesting that not all failures can be blamed on policy shocks.

Social media, meanwhile, reacted with mixed views. While some users sympathized with Kundra’s plight, others mocked him for “using demonetisation as an excuse.”

Shilpa Shetty’s Silence

Actress Shilpa Shetty, Kundra’s wife, has not commented publicly on the matter. In the past, she has stood by him during controversies, urging privacy and patience as legal proceedings unfold. Sources close to the couple say she continues to support him personally but is avoiding public statements to prevent further media frenzy.

What Lies Ahead

The investigation is still in the early stages. Authorities are examining the financial documents to determine whether Kundra’s business collapse was genuinely due to demonetisation or if there were elements of fraud involved.

Legal experts suggest that if Kundra can prove that the losses were caused by external economic factors, the charges may weaken. However, if evidence surfaces of misappropriation or deliberate deception, the case could take a serious turn.

For now, Raj Kundra’s image as a businessman faces another test. His repeated legal run-ins have made him one of Bollywood’s most controversial figures.