Government Initiates Probe into Eros International’s Financial Accounts Over Allegations of Misreporting and Fund Diversion

The Ministry of Corporate Affairs has launched a probe into the financial accounts of Eros International Media based on information from two unidentified government officials who spoke to Reuters. The investigation was triggered by allegations from the market regulator that the media company engaged in financial misreporting and fund diversion in June. The ministry was convinced that an inspection was necessary to examine the allegations of fund siphoning. Eros International Media, known for being a distributor and producer of movies and owning the popular OTT streaming platform Eros Now, is under scrutiny.

Both the Ministry of Corporate Affairs and Eros International have not yet responded to requests for comments via email. In a preliminary order, the Securities and Exchange Board of India (SEBI) had found initial evidence suggesting that Eros International’s financial accounts were overstated and did not provide an accurate representation of the company’s financial health.

Following SEBI’s findings, the Managing Director of Eros International Media, Sunil Arjan Lulla, and three company entities were barred from participating in the securities market. Eros International challenged this order earlier this month. As part of the investigation process, the Ministry of Corporate Affairs has the authority to record statements from company officials and request relevant documents. The ministry is required to compile its report within a six-month timeframe, as stipulated by Indian law.

Source: Reuters