Enforcement Directorate quizzes T-Series, Saregama honchos

Chief of T- Series Bhushan Kumar. (File)

THE ENFORCEMENT Directorate (ED) on Saturday questioned T-Series baron Bhushan Kumar and Vikram Mehra, Managing Director, Saregama India Ltd, in connection with a case pertaining to non-payment of royalties to artistes and lyricists.

The central agency has also summoned other music labels like Sony, Universal and YRF (Yash Raj Films) to join the probe. Aditya Chopra, head of YRF, has been summoned to the agency’s Mumbai head office on November 9, sources said.

An email sent to YRF did not elicit a response.

Earlier this week, the ED registered an Enforcement Case Information Report (ECIR) in the case. An ECIR is equivalent to an FIR registered under the provisions of the Code of Criminal Procedure (CrPC). The agency is probing a case of money laundering against the top five music labels.

On Saturday, Kumar and Mehra were questioned by ED Joint Director Dinesh Bhoir for a couple of hours. In their defence, both the head honchos claimed no irregularities had been committed on their part. “We were asked by the ED to join the investigations and, therefore, we presented ourselves before the joint director. Whatever documents were required have been shared,” T-Series president Vishal Bhanushali told The Indian Express.

According to sources, the ED, which has been probing the case since December 2016, had questioned two telecom giants and major music channels in the past before focusing its attention on the music companies.

Sources said in 2006-07 telecom companies made a windfall when they offered caller tune for the hit Bollywood song Kajra Re from the movie Bunty aur Babli. Spotting a potential in offering Call Ring Back Tone (CRBT) service and Bollywood songs on digital radios and application-based music streaming services, these companies engaged an intermediary which, in turn, tied up with music labels to play their music.

“In one of the cases we found that a telecom company made around Rs 16,000 crore. According to sources, while the telecom giant retained 70 per cent of the earnings, it paid 30 per cent to an intermediary. This intermediary, in-turn, paid around Rs 2,000-2,800 crore to music labels. The music companies were required to distribute 50 per cent of this earning to the artistes and the lyricists, which has not been the case,” said an official familiar with the probe. “This is just from one company. We are now probing other telecoms and even satellite broadcasters. Once we study their contracts, we would be able to ascertain the value of the scam,” added the official.

Sources added that a chunk of the revenue was through CRBT and that the music labels ‘conveniently’ diverted the ringtone business to Phonographic Performance Limited (PPL), a copyright society for sound recording. “The PPL is controlled by the music companies. It was formed to deal with satellite broadcasters and digital platforms. Since it is controlled by music labels, they managed to dictate terms and deprive the artistes and lyricists of their dues,” added the official.

Meanwhile, post the amendment of the Copyrights Act in 2012, India Performing Right Society Limited (IPRS), the copyright society which issues licences for public performances, failed to re-register itself with the information and broadcasting ministry. In the absence of an intermediary between the artistes and the music labels, the music companies allegedly withheld the dues of the artistes and the lyricists.

The central agency is now probing if formation of PPL and failure to re-register IPRS was deliberately done by the music labels to keep the earnings. “While the public performances are a small size of the revenue, the real money is earned in selling their rights to digital and satellite space. We are probing if this was done by the music labels to retain control and dictate terms. In the absence of any intermediaries the music companies become powerful. The artistes and the lyricists are at their mercy and many don’t complain to safeguard their careers,” said another official.

The ED suspects the money made through withholding royalties are laundered by the companies. “We have asked the companies to explain their revenue and share their contracts. We are also studying their balance sheets to tally their profits,” said the official. “There are three routes in which the funds could have been diverted — round tripping, purchase of assets, wrongful disclosures. We are going through volumes and volumes of documents to find out the fund trail,” added the official.

According to sources, the ED took up the probe after a few artistes lodged a complaint with the EOW of the Delhi Police in December last year alleging that they were not paid the dues in accordance with the amended provisions of the Copyright Act.

“According to the amended provision, of the earning made, the music label is entitled to keep 50 per cent and the rest 50 per cent is equally distributed among the lyricists and the artistes. However, in the absence of IPRS, the companies kept the money made from the rights to use the music to themselves,” said an official.

Meanwhile, the ED raids, which continued till 2 am on Saturday, were carried out at eight locations including two locations in Delhi of T-Series, one in Kolkata of Saregama and five in Mumbai of T-Series and YRF. “During the searches we have seized a lot of incriminating documents which will be used to confront the companies,” added the official.

When approached for comments, Chitra Singh, wife of renowned ghazal singer Jagjit Singh, who passed away in 2011, said she would comment on the issue once the investigations into the case were completed. She is one of the whistleblowers in the case. “Whatever I want to say, I have told the agency. The probe is under way and it would be inappropriate to talk on it,” Singh said. She added that she will continue to fight for the rights of artistes for payment of royalties.