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According to the British tabloid News of the World, the father of 9-year-old Rubina Ali, who played the young Latika in the film, attempted to sell his daughter into illegal adoption for millions of rupees (about $290,000).
"This is an Oscar child!" Rafiq Qureshi, Rubina's father, reportedly told reporters who were posing as a wealthy family from Dubai.
According to a tipster, Rubina's family felt slighted by the filmmakers. "Despite the film doing so well and their pretty daughter becoming so famous, they are still living in such rough conditions," the source said.
"We live in one room — seven of us sleep on the floor," Rafiq reportedly said. "I earn £2 to £3 a day. I have to consider what's best for me, my family and Rubina's future."
Police in Mumbai are now investigating the allegations. Rubina's uncle told Reuters that the reports are false. "This is just an attempt to malign her name," he said. "After all, she has become world famous now, hasn't she?"
This is not the first time that the young "Slumdog" cast has been swept up in controversy. In January, several of the actors' parents spoke out to protest their lack of financial remuneration from a film that has grossed over $327 million at the international box office.
Director Danny Boyle and producer Christian Colson quickly defended arrangements for the young actors, saying the will be of "lasting benefit to them over and above the payment they received for their work." The children were said to be attending school for the first time and that resources for their education until the age of 18 had been made.
Rubina herself remained unaware during the News of the World sting operation. When she went with her family to meet the undercover reporters at a suite in a luxurious hotel, Rubina reportedly asked one person, "Can I stay in your bedroom? I've never seen a bed like this in real life. I've seen one like it in films, though."
At press time, representatives for Fox Searchlight, which distributed the film, had not responded to MTV News' request for comment.