Mumbai: The Enforcement Directorate (ED) has conducted searches at the premises of prominent film production and distribution company Eros Group 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 2000 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 a 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.”
ED officials seized documents including overseas entity records, property information, foreign bank account details, and digital devices for further investigation.
Sunil Lulla of Eros International Media, did not respond to messages and calls from TOI.
Eros Group owns rights to numerous films and has produced several successful movies.
The ED released an official statement on Friday stating: “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 2000 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 recently initiated the investigation against the group based on Securities and Exchange Board of India (SEBI) findings. During the examination, 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.