SEBI Order Summary

Order Reference: QJA/MN/CFID/CFID-SEC6/32159/2025-26

Key Quantitative Figures

  • ₹99.48 crore diverted from Eros International Media Limited through circular transactions
  • ₹143.05 crore fictitious revenue recorded during FY2013-14 to FY2015-16
  • ₹47.67 crore fictitious revenue recorded during FY2022-23 to QE September 2024
  • ₹2.31 crore declared dividends for FY2010-11 and FY2011-12 remaining unpaid
  • ₹6.17 crore total amount (dividend + interest) to be transferred to IEPF
  • 79 lakh total monetary penalties imposed on all noticees

Chronology of Events

Background: SEBI investigation initiated based on Eros International's write-off of ₹63.61 crore during FY2019-20 towards advances given to Mediaone Global for film co-production arrangements.

Company Status: Mediaone was under liquidation from 2015-2023 pursuant to Madras High Court directions. Trading in shares was suspended from June 27, 2016 to May 3, 2022.

Investigation Period: Forensic audit conducted by SKVM & Co. covering FY2013-14 to FY2023-24 revealed serious discrepancies.

Show Cause Notice: Dated September 10, 2025 served to all noticees.

Detailed Findings

Issue A: Fund Diversion of ₹99.48 Crore
  • Mediaone received ₹236.06 crore from Eros between FY2012-13 to FY2017-18 for film co-production
  • Only ₹136.58 crore used for "Kochadaiiyaan" film production
  • ₹99.48 crore routed back to Eros through same-day circular transactions via intermediary entities like Metronet Multimedia
  • Company continued to show ₹59.96 crore as payable to Eros in books for 11 consecutive years
  • Artificial journal entries passed to adjust balances without commercial substance
Issue B: Financial Statement Manipulation

FY2013-14 to FY2015-16:

  • Total revenue of ₹296.44 crore recorded, ₹143.05 crore found fictitious
  • Total purchases of ₹198.85 crore recorded, ₹173.54 crore found fictitious
  • Transactions involved Eros, Ritestone Solutions, Metronet Multimedia, Metro Films, and Shan Global
  • Circular fund movements and journal entries without underlying transactions

FY2022-23 to FY2024-25:

  • Revenue increased from ₹17 lakh (FY2021-22) to ₹21.35 crore (FY2022-23) - 125x increase
  • Recorded revenue from UK-based entities without rendering actual production services
  • ₹22 crore recorded in QE June 2024 for "sale of film rights" to Eros without underlying transfer
  • UK entities controlled by ex-director J Murali Manohar
Issue C: Non-payment of Declared Dividend
  • Dividends of ₹1,18,07,280 (FY2010-11) and ₹1,17,76,000 (FY2011-12) declared but not paid
  • Failed to transfer unpaid dividend to Unpaid Dividend Account within statutory period
  • Failed to transfer to IEPF after 7 years
  • Reversed dividend liability as "other income" in FY2021-22
Issue D: Non-cooperation with Investigation
  • Company and directors failed to provide complete information to BSE and SEBI
  • Delayed submission of accounting records
  • False statements made during investigation
  • Summons not complied with by certain directors
Issue E: Director Responsibilities
  • Suryaraj Kumar (MD): Active involvement in all violations since 2006
  • J Murali Manohar (Ex-director): Instrumental in diversion and manipulation schemes
  • K Sai Prasad (Whole Time Director): Involved in recent manipulation despite claiming technical ignorance
  • M Srinivas Kumar (CFO): Certified false financial statements
  • Audit Committee Members: Failed in oversight duties

Regulatory Violations

SEBI Act, 1992: Sections 12A(a), (b) & (c)

SEBI (PFUTP) Regulations, 2003: Regulations 3(b), (c) & (d) & Regulation 4(1), 4(2)(f), (k) and (r)

SEBI (LODR) Regulations, 2015: Regulations 4(1)(a), (b), (c), (e)(g), (h), (j), Regulation 33(1)(a), (c) and Regulation 48

Companies Act, 1956/2013: Sections 205(1A), 205A(1), 207, 124, 125

SEBI Directions

1. Mediaone directed to recover ₹99.48 crore with 12% interest from Eros within 3 months

2. Transfer ₹6.17 crore to IEPF within 1 month

3. Market access restrictions:

  • Mediaone Global & Suryaraj Kumar: 3 years
  • J Murali Manohar, K Sai Prasad, M Srinivas Kumar: 2 years

4. Monetary penalties:

  • Mediaone Global: ₹26 lakh
  • Suryaraj Kumar: ₹28 lakh
  • J Murali Manohar: ₹12 lakh
  • K Sai Prasad: ₹13 lakh
  • M Srinivas Kumar: ₹12 lakh
  • Timothy Moses: ₹3 lakh
  • Saraswathy Gopalan: ₹5 lakh

Financial Impact

  • Direct financial impact quantified in the order
  • Company required to recover diverted funds
  • Significant monetary penalties imposed
  • Market access restrictions affect future business operations