The Enforcement Directorate has conducted searches at the premises of once leading production and distribution company Eros International Media Ltd. and its senior executives including Sunil Lulla, in alleged Foreign Exchange Management Act (FEMA) violations involving Rs. 2,000 crore fund diversion.
A press release issued by the ED stated: “In this case, it has been found that Eros paid Rs. 2,000 crore (approx.) as content advances to certain entities between FY 2012-13 and FY 2020-21. Eros wrote off major amounts due from these entities under the pretext of non-recovery due to the COVID-19 pandemic as a part of balance sheet cleaning exercise. In this manner, Eros had devised a scheme to inflate its financial statements by paying content advances which were later diverted or round-tripped back to the company, with fictitious movie rights purchases used to hide the true nature of these transactions.”
An official statement from ED on February 7 stated: “ED has initiated investigation on the basis of SEBI investigation against Eros group and its promoters for alleged misrepresentation of financials and diversion/siphoning of funds amounting to around Rs. 2,000 crore. The main entity of Eros group is Eros International Media Ltd., which is an Indian motion picture production and distribution company. Eros co-produces, acquires and distributes Indian films in multiple formats worldwide including theatrical, television, syndication and digital platforms.”
The ED identified Rs. 300 crore from the total amount, that was allegedly sent to firms abroad on the pretext of film production payments despite no film produced by those entities. ED officials have seized documents including Overseas entity records, property information, foreign bank account details, and digital devices for further investigations.