Sebi refuses to stay securities market ban on Eros International Media
The ban will also continue on MD Sunil Arjan Lulla, CEO Pradeep Kumar Dwivedi, and promoter entities Eros Worldwide FZ LLC and Eros Digital Private Ltd.
on Friday refused to lift the securities market ban imposed on Eros International Media Ltd and four others in an alleged fund diversion case.
Further, an investigation by SEBI will be completed in six months in the matter, according to the order.
Apart from Eros International, the ban from dealing in the securities market will continue on its Managing Director Sunil Arjan Lulla, Chief Executive Officer Pradeep Kumar Dwivedi and the two promoter entities, Eros Worldwide FZ LLC and Eros Digital Private Ltd.
SEBI, in an interim order in June, had prohibited these five entities from the securities markets in a case pertaining to the possible diversion of funds based on prima facie findings, and now, it has confirmed the ban against them.
In its confirmatory order passed on Friday, SEBI said that "no cogent reasoning has been furnished by the noticees (the five entities) about the prima facie findings in the interim order, including the allegations of siphoning off funds to related or promoter-controlled entities, overstatement of books of accounts of Eros etc".
Accordingly, SEBI said the five entities will continue to be restrained from buying, selling, or dealing in the securities directly until further orders.
Further, Lulla will continue to be prohibited from holding the position of a director or key managerial personnel in any listed company, including Eros or its subsidiaries, until further orders.
Dwivedi will continue to be prohibited from holding the position of a director or key managerial personnel in any listed company, other than Eros, until further orders.
In its interim order, SEBI, prima facie, had found that the books of accounts of the company have been overstated and do not present a true and fair picture of its financial health.
"The transactions between the content advance entities and the trade receivable entities, raise the possibility that Eros International was circulating funds whereby amounts transferred as content advances were subsequently recognised as revenue by routing it through trade receivables entities," SEBI had stated.
The regulator had also noted that the company was still advancing funds to entities that have been potentially involved in siphoning off funds to entities related to the promoters.
In August, the Securities Appellate Tribunal (SAT) rejected appeals of Eros International Media Ltd and others in the matter.