On Wednesday morning, entertainment company Lyca Productions filed a defamation case against Tamil news daily Malai Murasu at the Court of Metropolitan Magistrate, in response to an article which claimed that the company was involved in a multi-crore fraud.
The article, published on June 21, the headline: “Popular Tamil movie production company involved in a multi-crore fraud; 19 arrested in France”. According to the article, Lyca Productions is involved in the same tax fraud and money-laundering scandal that has hit telecom company Lyca Mobiles. The article further stated that the production company is connected with former Sri Lankan president Mahinda Rajapaksa.
Although both Lyca Productions and Lyca Mobiles are owned by Sri Lankan businessman Subaskaran Allirajah, the production company functions independently in Tamil Nadu, and is only a sub-group of Lyca Mobiles. An associate close to Lyca Productions’ COO, Raju Mahalingam, confirmed that the lawsuit reports were true. A press statement released late Tuesday evening also stated that Lyca Productions has no involvement with what is going on in France.
— Lyca Productions (@LycaProductions) June 21, 2016
The production company is currently working on the shoot of 2.0, the sequel to Rajinikanth’s Endhiran. The company’s last film, Enakku Innoru Per Irruku, released last Friday.
Allegations against Lyca Mobiles surfaced after the Daily Mail reported that 19 people linked to the telecom company had been arrested in France in connection with a multi-million pounds tax and money-laundering scandal. The paper also claimed that the company had donated at least £2.2 million to British Prime Minister David Cameron’s conservative party.
The 19 arrested in the raid in France includes Lyca Mobiles’ director in France, Alain Jochimek, who is also a well-known Jewish community leader in the country, where he runs B’nai B’rith, a pro-Israel service organisation.
The Daily Mail article is a follow-up of an investigation report published by Buzzfeed in October last year, which carried evidence that the telecom company was involved in “employing three cash couriers to drop rucksacks stuffed with hundreds of thousands of pounds twice a day at post offices scattered across London”.
According to the Buzzfeed investigation, Lyca Mobiles has been selling prepaid calling cards on the black market in Paris in exchange for cash, and has been using “a vast system of false billing” to invoice fake companies for the sales, in order to conceal other illicit payments.
Lyca Mobiles has denied any financial malpractice. So far, 8 of the 19 accused have been released on bail.