Eros International Appeals to SAT over SEBI’s Ban from Securities Market

Eros International Appeals to SAT over SEBI’s Ban from Securities Market

Eros International Media Ltd. has filed a petition with the Securities Appellate Tribunal (SAT) challenging an order that was issued by the Securities and Exchange Board of India (SEBI) prohibiting the company, its Managing Director (MD) Sunil Arjun Lulla, and its Managing Director (CEO) Pradeep Kumar Dwivedi from accessing the securities market until further orders.

On 22 June, the SEBI had issued an interim order that prohibited the aforesaid persons from purchasing, selling, or otherwise dealing in securities in any manner, either directly or indirectly, until further orders.

In addition, it stated that Lulla and Dwivedi were not allowed to serve as Directors or senior managerial staff in any publicly traded firm, including Eros International and any of its subsidiaries, until further orders were issued.

The ruling was made in light of the prima facie findings that the firm seemed to have misreported its financials and diverted cash. These findings led to the conclusion that the corporation should be punished.

The ex parte interim order issued by SEBI stated, “I am of the view that pending completion of the detailed investigation initiated by SEBI, there is a need to pass an ad-interim ex-parte order to protect the interests of public shareholders as well as the interest of the general investors and to prevent any further deterioration of funds/assets of Eros.”

The appeal is set to be heard on 13 July, by a panel consisting of Justice Tarun Agarwala and the Presiding Officer, Meera Swarup.

In addition to this, the appellants have pleaded an immediate stay on the implementation of SEBI’s ruling.

The appellants have requested that the SEBI order, as well as every finding, observation, and conclusion included in the order, be set aside as a final form of relief.

In the appeal, Eros argued that the interim order should be reversed since it was issued without first showing that there was any kind of manipulation of the securities market.

The company further contended that such temporary orders could only be issued in the direst of circumstances, when the action that needed to be halted was about to take place. According to the information provided by the firm, this was not the case with Eros.

According to the recounting in the appeal, the case began in 2019 when Eros made disclosures of various impairments with regard to amounts receivable from certain content advance businesses and trade receivable entities. This information was included in the case since it was relevant.

These comments were investigated by the National Stock Exchange (NSE) of India, which subsequently forwarded a preliminary examination report to the SEBI.

The SEBI began a comprehensive inquiry of the company’s dealings in regard to transactions from 2011 to 2012 after receiving this report. The appeal noted that this took place 11 years after a delay for which no explanation was given.

After some time had passed, the SEBI requested that Eros and key officials of the company provide certain papers. In response, Eros asked for more time so that he could submit the same information.

In a meeting that took place on 24 April, 2023, the SEBI demanded an explanation from the executives over a payment of Rs. 21.75 crores that had been made to Viyaana Media Works.

The appeal noted that in response to the summons, the executives had mailed the pertinent information and documents that were requested by the SEBI on April 28.

Retaliating to this, the SEBI issued an interim order on 22 June, 2023.

Eros International Media Ltd., is being represented by Naik Naik & Co.