SEBI restrains Eros International’s CEO and MD from holding positions; bars Co. from market

23 Jun 2023 , 10:22 AM

On June 22, the Securities and Exchange Board of India (SEBI) announced that it barred Eros International Media, CEO Pradeep Kumar Dwivedi, and promoters from the securities market until further notice, owing to alleged violations of trade practice regulations.

Sunil Arjan Lulla, Vice Chairman, and Managing Director of Eros International, has also been barred from holding any directorial position in any listed company, including Eros International or its subsidiaries, by the capital markets regulator.

Dwivedi has been prohibited by SEBI from assuming any directorial role in any publicly listed company except for Eros International. Additionally, SEBI has also passed restraining orders against Eros Worldwide FZ and Eros Digital Private to participate in the securities markets until further instructions.

SEBI has initiated an investigation to determine if any funds have been illicitly diverted from the company, and the investigation is still ongoing. In its interim order, SEBI stated that it has appointed a forensic auditor to thoroughly examine the company’s financial records.

‘Pending the outcome of the detailed investigation initiated by SEBI, there is a need to pass an ad-interim ex-parte order to safeguard the interests of public shareholders as well as general investors and to prevent any further deterioration of Eros funds/assets,’ the interim order stated.

The statements were examined by the National Stock Exchange (NSE), which forwarded a preliminary investigation report (PER) to SEBI. The company’s revenue from operations, trade receivables, and loans were mostly related-party transactions, according to the officials. These had increased significantly in the fiscal year under consideration, or FY20.

The transactions hinted that the company engaged in a financial misstatement or fund siphoning/diversion.

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