Sunil Lulla’s 13-month defiance against SEBI ends in Rs. 50 lakh penalty; Eros International under fire

In a decision that further impacts the standing of Eros International Media, the capital markets regulator, SEBI (Securities and Exchange Board of India), has slapped a fine of Rs. 50 lakhs on the former managing director of the company, Sunil Lulla, in a case related to the violation of regulatory norms.

In June 2023, SEBI, through an interim order, prohibited Eros International and Sunil Lulla from securities markets in an alleged case of diversion of funds. The regulator also disallowed Lulla from holding any key managerial position in any listed company, including Eros, until further orders. Though Sunil Lulla appealed against this order, the Securities Appellate Tribunal (SAT) upheld the order of SEBI in August 2023.

As per reports, Sunil Lulla failed to adhere to the orders of SEBI and did not resign from the position of director of Eros International Media until July 2024, that is, 13 months since the order was passed against him. Accordingly, the SEBI issued a show-cause notice to him on April 22, 2024. Therefore, Sunil Lulla left his position in Eros on July 31, 2024. However, this was done only after receiving the notice before launching of prosecution on July 4.

In an order passed on October 30, SEBI observed that Sunil Lulla did not comply with their order from June 2023 to July 2024. It also remarked that it is a matter of serious concern when a person in his position flouts the directions given by the securities market regulator and shows complete disregard for it.

Moreover, on October 29, SEBI imposed a fine of Rs. 12 lakhs each on the 17 entities for non-compliance with its investigation and failure to provide complete and timely information in the matter of Eros International Media Ltd. Hence, the total fine totalled around Rs. 2 crores.

As per reports, SEBI continues to scrutinize the company and its related entities.