SEBI Orders Forensic Audit Of Eros International

The Securities and Exchange Board of India (SEBI) appointed KPMG Assurance and Consulting Services LLP as the forensic auditor of Eros International Media Ltd.

The development comes as the Indian capital markets regulator believes that the disclosure of financial information and the business transactions of Eros have been dealt with in a manner, which may be detrimental to the interest of investors or the securities markets, according to the SEBI’s letter dated 31 October to the Indian media and entertainment company.

The regulator also believes that an intermediary or a person associated with the securities market may have violated the provisions of SEBI’s regulations.

Eros submitted the copy of the letter with the stock exchange today.

SEBI said KPMG Assurance will review the company’s consolidated financial statements from FY18 to FY20.

Following are the other key points from the letter:

• The forensic auditor will verify:

• Manipulation of books of accounts

• Misrepresentation, including of financial or business operations

• Wrongful diversion or siphoning of company funds by promoters, directors, or key managerial persons (KMPs)

• Related party transactions

• Any other matter

SEBI said KPMG Assurance is authorized to seek information from Eros, promoters and KMPs during the process of the assignment.

The forensic auditor is also authorized to visit the company’s premises for data collection and working on accounting software of the company, it added.

The regulator directed Eros to cooperate during the forensic audit process.