Sebi slaps Rs 50 lakh fine on Lulla for violating mkt norms in Eros matter

Capital markets regulator Sebi has slapped a fine of Rs 50 lakh on promoter and former MD of Eros International Media Sunil Arjan Lulla in a case related to the violation of regulatory norms.

In June 2023, Sebi passed an interim order, wherein the regulator prohibited five entities, including Eros International and its Managing Director (MD) Sunil Lulla from securities markets in a case on the possible diversion of funds based on prima facie findings.

The regulator also barred Sunil Lulla from holding the position of a director or a key managerial personnel in any listed company, including Eros or its subsidiaries or any Sebi-registered intermediary until further orders.

Thereafter, Sunil Lulla appealed before the Securities Appellate Tribunal (SAT) against Sebi's interim order. However, the tribunal upheld the order of the regulator in August 2023.

In October 2023, the regulator confirmed the ban against them.

The markets watchdog observed that Sunil Lulla had failed to comply with Sebi's directions and did not resign from the directorship of Eros International Media, and allegedly failed to comply with the order of the regulator's adjudication proceedings, which was initiated in respect of him.

Thereafter, the regulator issued a show-cause notice to Sunil Lulla on April 22, 2024.

In its fresh order, Sebi noted that Sunil Lulla had resigned from his position with effect from July 31, 2024, i.e. more than 13 months, that too only after receiving the notice before launching of prosecution on July 4, 2024, by the market regulator against him.

This shows the recalcitrant nature of Sunil Lulla (noticee). Therefore, it is observed that he was not compliant with the order of the regulator from June 2023 to July 2024, the Securities and Exchange Board of India (Sebi) said in the order on October 30.

According to Sebi, if a person in his position flouts the directions given by the securities market regulator, it should be viewed even more seriously. His (Sunil Lulla) action showed complete disregard for the regulator, which is completely unbecoming of a person in his position.

On October 29, Sebi imposed penalties totalling Rs 2 crore on 17 entities for non-compliance with its investigation and failure to provide complete and timely information in the matter of Eros International Media Ltd.

The regulator levied a fine of Rs 12 lakh each on the 17 entities.

The matter revolves around alleged financial irregularities and mismanagement concerning agreements between Eros International Media Ltd (EIML) and Spicy Entertainment & Media Ltd (SEML), along with other related entities.