Eros International Shares Decline After SEBI’s Crackdown

The shares of Eros International Media Ltd declined by 20 per cent during the early trade session after the market regulator, the Securities and Exchange Board of India (SEBI) barred the company's CEO - Pradeep Kumar Dwivedi from the securities market until further notice. The regulator has made a move following an allegedly breached trade practice regulation.

The share prices of the company deteriorated and stood at Rs 21.08 against the previous day's close of Rs 26.34 on the Bombay Stock Exchange (BSE).

Yesterday, the shares of Eros International Media were down by 1.42 per cent and traded at Rs 26.34 against the previous day's close of Rs 26.72 per share.

Eros International Media informed the exchanges about the SEBI order post-market hours.

Since the beginning of the year, the share of the media firm has grown by 17.51 per cent and has declined by 9 per cent.

SEBI, the market regulator, has restrained the Company's Chief Executive Officer (CEO) - Pradeep Kumar Dwivedi from holding any directorial position in any of the listed companies other than Eros International. In its interim order, the SEBI has said "Notices 1 to 5 are restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever until further orders".

Meanwhile, the media firm said that "We are in the process of seeking legal advice in the matter and taking appropriate actions, as may be advised."

For the financial year 2019 - 2020, the financial earning disclosed by the company had an impairment provided by the company on 'Content Advances' and 'Film Rights' which amounted to Rs 1553.52 crore. During the same year, the company wrote off trade receivables to the tune of Rs 519.98 crore. According to the disclosure by Eros, the National Stock Exchange (NSE) had examined the financial statements of the company and forwarded a preliminary examination report to SEBI.

The report had the observations that the revenue from operations, loans and trade receivables given by EROS mainly comprised related party transactions and the same had surged substantially in FY 2019-2020. The preliminary report also noted that the prima facie of these transactions indicated that the company was engaging in the diversion of funds or financial misreporting or siphoning of funds.