Income Tax raids at Namit Malhotra's office, home a month before Ramayana release

The Income Tax Department on Wednesday conducted raids at the Mumbai office and studio of Prime Focus Limited, as well as at the home of its chairman and Ramayana producer Namit Malhotra. Searches were also carried out at the premises of Malhotra’s chartered accountant.The raids began on October 7 and continued through Wednesday morning. Initial reports have linked the action to foreign remittances, although the Income Tax Department has not yet officially revealed what transactions are being investigated or the exact reason behind the searches.The development comes exactly a month before the release of Nitesh Tiwari’s magnum opus Ramayana, which is being produced by Malhotra. It has also had an immediate impact on Prime Focus’ stock, with the company’s shares falling around 8 per cent after news of the raids emerged.What happened at Prime Focus?The searches covered multiple locations in Mumbai, including Prime Focus’ office and studio in Film City. Malhotra’s chartered accountant’s premises were also searched as part of the operation. According to initial reports, the action is linked to foreign remittances. However, there has been no official word yet on the nature of the transactions being examined or whether any specific irregularity has been found.Reports have also suggested that the searches were based on inputs gathered during investigations carried out last week at locations linked to actor Rakul Preet Singh, producer Vashu Bhagnani and Panorama Studios. That has led to speculation about a possible connection between the cases. However, no official agency statement has established a direct link between those investigations and the searches at Prime Focus or Malhotra’s premises.For now, the Income Tax Department has not disclosed the exact nature of the transactions under scrutiny.Prime Focus shares fall 8 per centThe Income Tax action quickly spilled over into the stock market.Prime Focus shares came under selling pressure after the news emerged and fell around 8 per cent when trading began on Wednesday. The company is a major player in the global media and entertainment business, with work spanning visual effects, animation, post-production and content creation.Malhotra heads the company, which has a significant international presence. Reports have said that around 92 per cent of Prime Focus’ revenue comes from overseas operations, making the reported foreign-remittance angle particularly significant for the company.For the entertainment industry, though, Malhotra’s other big project is what has made the raids especially noteworthy.Namit Malhotra's RamayanaMalhotra is the producer of the ambitious two-part Ramayana, which has been one of the most closely watched Indian films in the run-up to its release.Ranbir Kapoor plays Lord Rama, Sai Pallavi stars as Sita and Yash plays Ravana. The film also features Sunny Deol, Rakul Preet Singh, Arun Govil and Ravi Dubey in important roles.The first part is scheduled to release on November 5, coinciding with Diwali, while the second part is expected to arrive next year.The film has already attracted huge attention because of its scale, cast and the anticipation surrounding Tiwari’s take on the epic. Now, with searches taking place at the premises of its producer and at the company he heads, Prime Focus has found itself in the news for reasons far removed from the film’s much-awaited release.- Ends