The Securities and Exchange Board of India (Sebi) on Tuesday imposed sanctions totaling ₹2.04 crore from 17 entities for non-compliance in its investigation into alleged financial irregularities at Eros International Media Ltd (EIML).

The markets regulator’s preliminary findings suggest possible siphoning of funds and manipulation of financial records, particularly with regard to write-offs and provisions for content advances and trade receivables.

Sebi has summoned the directors of three associated entities: Nextgen Films Pvt. Ltd (now Viyanaa Media Works Pvt. Ltd), Spicy Entertainment & Media Ltd and Upkar Dealtrade Pvt. Ltd, which had entered into agreements with Eros, to verify whether the films financed by Eros were actually produced.

The directors were invited to appear personally and were required to submit relevant documentation. However, despite multiple opportunities to comply, Sebi found that none of them appeared in person before the investigating authority and provided only partial information, which hampered the progress of the investigation.

The Sebi adjudication officer held that this violated the provisions of the Sebi Act, which required cooperation in investigations.

“The available documents do not quantify the disproportionate gain made by the noticeees nor the amount of losses suffered by the investors due to non-compliance with the subpoena. However, such non-compliance must be taken seriously,” the regulator said.

Barnali Mukherjee, the adjudicating officer, said: “This has thwarted Sebi’s attempts to effectively gather vital evidence to timely conclude the investigation proceedings. »

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Accordingly, Sebi imposed a fine of ₹12 lakh from each of the 17 directors involved. “If people are allowed to ignore summons issued to them during the course of investigation, Sebi, as the securities market watchdog, will not be able to discharge its obligations “legal protection of the interests of investors and safeguarding the integrity of the securities market”, reads the Sebi order.