October 10 , 2025 : Businessman Raj Kundra, husband of Bollywood actress Shilpa Shetty, has reportedly claimed that the effects of demonetisation in India hindered his ability to repay a loan, amid ongoing allegations of financial irregularities and fraud. The statement has emerged during court proceedings, shedding light on the challenges faced by Kundra in meeting financial obligations during the sudden cash liquidity crisis.
According to reports, Kundra informed the court that the 2016 demonetisation drive, which invalidated ₹500 and ₹1,000 currency notes overnight, caused significant disruptions to his cash flow and business operations. “The demonetisation created an unprecedented cash crunch. My businesses were impacted, and I was unable to honour the repayment schedule despite my intention to do so,” Kundra reportedly said.
Kundra is currently facing multiple allegations of fraud, including claims related to investments, business loans, and financial mismanagement. The case has attracted widespread media attention due to his high-profile status and connections to Bollywood. While the court examines the legal implications of these accusations, Kundra’s statement underscores the broader impact of policy changes on business operations in India.
Legal experts note that demonetisation had far-reaching effects on sectors reliant on cash transactions, including real estate, entertainment, and small to medium enterprises. “While demonetisation was aimed at curbing black money and promoting digital transactions, it also created liquidity challenges for businesses across the country. Many entrepreneurs faced delays in loan repayment and operational setbacks,” said advocate Ramesh Pillai, a financial law expert.
Kundra’s defense appears to focus on external factors affecting his ability to repay loans rather than deliberate financial misconduct. However, the court will carefully assess the claims in the context of contractual obligations, loan agreements, and the timeline of financial transactions.
The businessman’s legal team is expected to provide documentation showing how demonetisation impacted cash inflow, payments to creditors, and the functioning of his businesses during the affected period. This evidence may play a crucial role in determining whether Kundra’s explanation can mitigate liability or penalties associated with the loan default.
Meanwhile, investigators are examining the broader allegations of fraud, which reportedly include misrepresentation to banks, irregular fund transfers, and possible breaches of financial regulations. Authorities have stated that high-profile cases like Kundra’s are handled with meticulous scrutiny to ensure due process and accountability.
The case has also sparked discussions about how sudden economic policies can have unintended consequences for businesses, particularly when companies rely heavily on cash transactions. Industry analysts have noted that several business owners struggled during demonetisation, some defaulting on loans or delaying payments despite maintaining overall solvency.
Public and media attention on Raj Kundra’s case has remained intense, partly due to his celebrity connections and the high-profile nature of the allegations. The court proceedings are closely monitored, with legal analysts debating the potential impact of Kundra’s defense on the outcome of the case.
While the demonetisation explanation is being considered, authorities are also evaluating whether there was any deliberate attempt to misrepresent financial status or evade repayment obligations. Legal experts emphasize that citing external factors like demonetisation does not automatically absolve individuals of responsibility; the court examines intent, documentation, and actual financial impact.
In conclusion, Raj Kundra’s claim that demonetisation disrupted his ability to repay loans adds a new dimension to the ongoing fraud investigation. The case highlights the complexities of financial accountability in high-profile business operations and the influence of macroeconomic policies on private enterprises. Courts will continue to weigh evidence, consider expert testimony, and assess whether the cash crunch caused by demonetisation materially affected Kundra’s repayment capabilities, while also addressing the broader allegations of fraud and financial irregularities.
Summary
Raj Kundra claims demonetisation disrupted his business cash flow, preventing timely loan repayment amid ongoing fraud allegations. Courts are reviewing evidence to determine financial responsibility and intent.