Ullu Digital's IPO Faces Multiple Complaints Over Explicit Content

A host of governmental bodies are probing if an Indian digital application seeking funds through an IPO actually sells pornographic content using school children. 

Complaints have reached the Mumbai-based Securities and Exchange Board of India, the Ministry of Corporate Affairs, the Ministry of Electronics and Information Technology which, in turn, have started probe against Ullu Digital, according to letters written to multiple regulators and reviewed by this reporter.

Ullu Digital, a provider of erotic content, has filed its draft red herring prospectus to raise an estimated Rs 130-150 crore on the platform for the IPOs of small and medium enterprises.

People aware of the matter said there have been several cases against this digital application for over four years and investigations are currently in progress.

In a letter to Rajeev Chandrasekhar, Union Minister of State for Electronics and Information Technology, the National Commission for Protection of Child Rights has alleged that the Ullu App, accessible on both play store and ioS mobile platforms, contains extremely obscene content, according to a copy of the letter reviewed by this reporter.

“The App is easily accessible on Google and Apple and does not seem to have any KYC requirement. There are specific shows that target school kids with explicit sexual scenes," wrote Priyank Kanoongo, chairperson of the Commission. "The content is easily accessible to minors. The commission recommends your good office to inquire and take appropriate action against Ullu App, Google play store and ioS as per law.”

Kanoongo, it is learnt, has also written to Priya Chatt, head of public policy, Google and YouTube, on this issue. 

The Securities and Exchange Board of India, India’s market regulator, and and the Bombay Stock Exchange are also looking into complaints against the Ullu App for its alleged pornographic content.

In a letter, the copy of which is with this reporter, Uday Mahurkar, former Central Information Commissioner and current founder of Save Culture Save Bharat Foundation, has asked both SEBI and BSE to probe Ullu Digital for a number of violations. Mahurkar said in its Draft Red Herring Prospectus, Ullu Digital has acted in contravention of various laws including securities laws and regulations such as SEBI Issue of Capital and Disclosure Requirements and SEBI Listing Obligations and Disclosure Requirements.

“Ullu Digital Limited has provided wrong and misleading information regarding the history of criminal cases against its promoters. Ullu promoter Vibhu Agarwal has been accused of outraging the modesty of a female employee of Ullu and a case has been registered in Mumbai," Mahurkar alleged. "Agarwal has been in the news for producing sexually perverted content. Several cases have been filed against Ullu App in Madhya Pradesh High Court and Supreme Court."

Vibhu Agarwal didn't respond to queries. In an earlier conversation with this reporter, Aggarwal had termed his platform “creative, real and original”.

Mahurkar alleged Ullu Digital also did not disclose that Digital Publisher Content Grievances Council, a self-regulatory body of OTT platforms, has “reprimanded Ullu platform after taking grave objection to the content available on Ullu Platform” in May, 2023. 

A SEBI official told this reporter that the complaints were being looked into by the market regulator. Officials of the BSE did not respond to repeated calls.

One complaint, filed by Abhay Shah, has reached the Registrar of Companies. Shah, coordinator of Swachh Cyber Bharat, has alleged Ullu Digital has violated several laws by producing and disseminating obscene, indecent and pornographic material and has called upon the ROC to initiate investigation. “The company is engaged in advertisement, production and distribution of illegal content which is obscene, profane, lascivious, sexually explicit pornography in spoken language and graphic display,” Shah said in his letter. This reporter has reviewed a copy of the letter.

Shah further said: “It is pertinent to state that pursuant to a complaint against the ULLU App, the Digital Publisher Content Grievances Council (DPCGC), a self regulatory body of OTT platforms, has reprimanded Ullu Platform after taking grave objection to the content available on the platform.” This reporter has seen a copy of the order dated June 19, 2023. 

A spokesperson of ROC acknowledged that the registrar has received the complaint and Ullu Digital was being investigated. 

Ullu and other such pornographic apps operate out of Meerut, a sleepy town famous for the 1857 Sepoy Mutiny but now India’s biggest supplier of erotic films to some lesser known over-the-top or OTT platforms. 

Ullu lists titles such as Call Centre, Kavita Bhabhi (one of the top five most watched web series during the COVID-19 quarantine in Asia), Mastram (which garnered several lakh views) Palang Tod, Taxi, Wife in a Metro, Charamsukh, Mona Home Delivery. The subscription rates are very low. It is Rs 198 for a year and Rs 144 for six months. A three-month subscription is Rs 99, a five-day package for Rs 36 only.

Launched in December 2018, Ullu is notorious for its erotic content. DRHP According to its DRHP, the company reported a revenue of Rs 93 crore in FY23. During the lockdown, Ullu saw 250% growth in subscriptions.

Ullu is not the only platform providing erotic content. Other such platforms include Kooku, DesiFlix, Hot Shots, Primeflix, Gup Chup and Flizmov.

In Meerut, such films are directed by youngsters who work from hotel rooms or rented apartments on budgets as low as Rs 1,25,000 to Rs 2,50,000 per episode. An estimated 50 to 75 films are produced in multiple languages from Meerut, which lies sandwiched between the Ganga and Yamuna rivers. The movies are shot on DSLR cameras, sometimes on high quality handset phones. The plots are cheap copies of South American sex videos. Fly-by-night filmmakers make four to five movies per year.

Erotic movies have been on a high ever since the Indian government forced a 21-day lockdown period in 2020. “Soft or hard porn is all over OTT platforms and people are watching it like mad. So the craze has reached an all-time high,” says Delhi-based filmmaker Ishani K Dutta.

Indians are using virtual private networks to access such websites like Pornhub and other adult entertainment portals. The only difference between Pornhub and these OTT platforms is that Pornhub has made its premium content free worldwide, while the OTT platforms charge a moderate fee from subscribers. KPMG says India will have more than 500 million online video subscribers by FY24, the second biggest market in the world behind China alone.

In 2018, India banned hundreds of porn websites, a move that was followed by the downloading of VPNs but the OTT market changed the scales. Consider this: just one search on the web for Meerut and porn produces 959,000 results. Expectedly, the small OTT platforms are seeing a large growth in customers.

But Gems of Bollywood, an independent think tank, says proliferation of such movies could create further trouble for school children. Worse, Ullu App’s raising cash from the market is “certainly not good news”.

“We have been constantly checking out platforms which routinely show high erotic content. We have been taking regular action against such platforms. Ullu should not raise cash from the market and then flood more erotic content which is highly undesirable. SEBI and Ministry of Corporate Affairs must take action,” says Sanjeev Newar of Gems of Bollywood.

Seasoned writer Vaishali Chandorkar Chitale says sex on small OTT platforms in a nation with a billion-plus population is going through the roof. “We do not need censorship but someone needs to keep a check so that rot does not spread fast.”

Shantanu Guha Ray is the Asia Editor of Central European News. He is author of 'Black Harvest: The India Coal Story' that will hit the stands in a few months.