ED raids Eros International Mumbai office in ₹2,000 crore forex violation case

Eros International Media Ltd informed the stock exchanges that the Enforcement Directorate conducted search operations at the company's registered office on Friday. The raids were part of an investigation into a ₹2,000 crore foreign exchange law violation case.

In a statement, the Enforcement Directorate (ED) said the searches were part of an ongoing probe into alleged "fund diversion" by Eros International Media Ltd and other entities within the Eros Group.

The agency stated that "evidence" has been collected indicating that Eros paid approximately ₹2,000 crore in content advances to certain entities between the 2012-13 and 2020-21 fiscal years.

"Eros wrote off significant amounts due from these entities under the pretext of non-recovery due to the COVID-19 pandemic as part of a balance sheet cleanup," the agency said.

"In this manner, Eros devised a scheme to inflate its financial statements by making content advance payments, which were later diverted or round-tripped back to the company. Fictitious movie rights purchases were used to conceal the true nature of these transactions," the agency alleged.

In a statement to the stock exchanges, Eros International Media Ltd said, “We hereby inform you of the search operations carried out under Section 37(3) of the Foreign Exchange Management Act, 1999, at the company's registered office by the Enforcement Directorate, Mumbai, which concluded on February 6, 2025. The company continues to operate as usual and will continue to cooperate with the authorities.”

The investigating agency stated that the probe was initiated based on a Securities and Exchange Board of India (SEBI) investigation into the Eros Group and its promoters for alleged financial misrepresentation and "diversion/siphoning" of funds amounting to approximately ₹2,000 crore.