Leading Bollywood film financier Bharat Shah has been found guilty of failing to inform police that the criminal underworld had muscled in on a film he made three years ago.
The same court also convicted Chori Chori Chupke Chupke producer, Nazim Rizvi, and assistant Abdul Rahim Allahbux Khan, who have been in custody since December, 2000, of being members of a criminal syndicate.
Shah was acquitted of several other charges, including extortion, criminal conspiracy and links with the underworld, but still faces up to seven years in jail.
Judge A.P. Bhangale told a packed Bombay courtroom Shah had concealed information that the producer was an associate of Chhota Shakeel - an underworld don on India's list of wanted criminals that it wants Pakistan to hand over.
The three men are due to be sentenced on Wednesday.
Shah and Rizvi were arrested by the Mumbai Police's Crime Branch in January 2001 for having underworld links with Shakeel.
According to the police, Chori Chori Chupke Chupke was a mob film financed by gangster Chhota Shakeel and that Rizvi was the front man for Shakeel to produce the film.
The police claimed to have taped a conversation between Rizvi and Chhota Shakeel with mention of financier Bharat Shah. The Income-Tax department also provided exhaustive details of the financial irregularities and underworld funding of several films waiting for release.
Meanwhile the Mumbai police has provided protection to film producers and stars including Rakesh Roshan, Hrithik Roshan, Shah Rukh Khan, J P Dutta, Mahesh Bhatt, Aishwarya Rai, Karisma Kapoor and Preity Zinta.