Sebi Fines 17 Entities Rs 2 Crore for Non-Compliance in Eros International Media Investigation

The Securities and Exchange Board of India (Sebi) has imposed fines totalling Rs 2 crore on 17 entities. These penalties are due to non-compliance with Sebi's investigation into Eros International Media Ltd. Each entity faces a fine of Rs 12 lakh, payable within 45 days, as per Sebi's directive.

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The investigation centres on alleged financial mismanagement involving Eros International Media Ltd. (EIML) and Spicy Entertainment & Media Ltd. (SEML). Sebi requested detailed information about SEML's shareholders and directors since its inception. It also sought data on agreements and transactions between EIML and SEML, including ledgers, bank statements, tax filings, co-produced films, incomplete or terminated projects, and payment details.

Non-Compliance with Investigation

Sebi noted that the entities repeatedly failed to cooperate with the investigation initiated by it. They did not provide complete information as required by summons issued between March and April 2023. Many entities submitted incomplete documentation or failed to provide essential documents like ledgers, agreements, and income tax returns.

Some agreements submitted were unverifiable as comprehensive or final. Several entities ignored multiple summonses or cited personal or professional reasons for non-attendance without valid evidence. Some claimed limited information availability due to resignations but failed to assist with critical data from their tenure.

Importance of Information

Sebi emphasised that the information sought by the Investigating Authority (IA) was crucial for drawing precise conclusions. Compliance with summonses would have enabled the IA to better examine the roles of various entities in fund siphoning and book manipulation concerning EIML.

The information included ledger extracts, agreements for advances received from EIML, and payment details from EIML. Sebi stated that the lack of compliance significantly hampered the investigation's progress.

Entities Penalised

The penalised individuals include 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 issued an interim order prohibiting five entities including Eros International from securities markets due to possible fund diversion based on initial findings. By October 2023, this ban was confirmed by the regulator.