SEBI's Recent Action Raises Concerns Over Fund Diversion And Corporate Governance At Eros International

The Securities and Exchange Board of India (SEBI) has taken strict action against Eros International, a prominent Indian film production and distribution company. SEBI has barred the company from the market and prohibited its CEO from holding board positions until further orders, according to business today.

SEBI has imposed restrictions on Dwivedi, preventing him from holding any directorial position in any listed company, except for Eros International. The regulatory body stated in its interim order that "Noticees 1 to 5 are prohibited from engaging in the buying, selling, or dealing of securities, directly or indirectly, in any manner whatsoever until further directives."

"If the said Noticees have any open position in any exchange-traded derivative contracts, as on the date of the order, they can close out /square off such open positions within 3 months from the date of order or at the expiry of such contracts, whichever is earlier."

The company provided an impairment of Rs 1,553.52 crore on "Content Advances" and "Film Rights" in its financial reports for FY 2019-20. Eros also wiped off trade receivables at Rs 519.98 crore that same year. As a result of this disclosure, the National Stock Exchange (NSE) looked over the company's financial accounts and sent a preliminary examination report to Sebi.