SEBI Fines 17 Entities Rs 2 Crore For Non-Compliance In Eros International Investigation

Markets regulator Sebi on Tuesday imposed penalties totalling Rs 2 crore on 17 entities for non-compliance with its investigation and failure to provide complete and timely information in the matter of Eros International Media Ltd. The regulator levied a fine of Rs 12 lakh each on the 17 entities and the amount needs to be paid within 45 days, according to SEBI's order.

The matter revolves around alleged financial irregularities and mismanagement concerning agreements between Eros International Media Ltd. and Spicy Entertainment & Media Ltd., along with other related entities.

The regulator sought detailed information regarding shareholders and directors of SEML since its incorporation; agreements and transactions between EIML and SEML, including ledgers, bank statements and tax filings, details of co-produced movies and reasons for incomplete or terminated projects and information on payments and refunds between the two companies.

In its order, SEBI noted repeated failures by various noticees (1-17) to cooperate with the investigation initiated by it and to provide complete information as required by summons issued between March and April 2023.

SEBI said many entities either provided incomplete documentation or failed to submit essential documents such as ledgers, agreements, and income tax returns. Some of the agreements provided could not be verified as comprehensive or final.

Further, several entities, despite being summoned multiple times, either failed to appear or cited professional or personal reasons for non-attendance without providing valid evidence.

Moreover, some entities claimed they could only provide limited information due to their resignation from the companies involved. However, SEBI noted their failure to assist with critical data even from their tenure.

SEBI said that the information sought by the Investigating Authority was very significant and relevant, which would have enabled the IA to draw precise conclusions on the matter.

"Had the Noticees complied with the summons and provided the complete information at the appropriate time and appeared before the IA to explain the matter, the IA would have been benefited and in a better position to examine the role of various entities involved in the siphoning of funds and manipulation of books and accounts in the matter of EIML."

"Further the information with regard to extracts of ledgers, agreements for which advance was received from EIML, details of payments received from EIML etc. It is therefore amply clear that the information sought by the IA was crucial and central to the investigation and failure on the part of the Noticees to comply with the summons had indeed hampered the investigation," SEBI said in its 68-page order.

The 17 penalised entities by the regulator are Sunita Patel Kamlesh, Nitin Boricha Kishor, Vikaram Vasudev Rajani, Dhrishti Vikram Rajani, Dev Govind Binani, Abhishek Das, Anindya Bikas Datta, Debjit Medda, Rina Kumari Singh, Sutapa Mukherjee, Manisha Kumari Singh, Gourab Ray Chaudhuri, Vinod Kumar Agarwal, Sumit Bhoot, Sheetal Suresh Kale, Anil Kumar Sajjankumar Sharma, and Debosmita Ghosh Dastidar.

In June 2023, SEBI, in an interim order, prohibited five entities, including Eros International, from the securities markets in a case pertaining to the possible diversion of funds based on prima facie findings. In October 2023, the regulator confirmed the ban against them.