RADNOR, PA / ACCESSWIRE / August 2, 2019 / The law firm of Kessler Topaz Meltzer & Check, LLP reminds Eros International plc (EROS) (“Eros”) investors that a securities fraud class action lawsuit has been filed on behalf of those who purchased or otherwise acquired Eros publicly traded securities between July 28, 2017 and June 5, 2019, inclusive (the “Class Period”).
Important Deadline Reminder: Investors who purchased Eros securities during the Class Period may, no later than August 20, 2019, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please visit www.ktmc.com/eros-international-plc-securities-class-action.
According to the complaint, Eros is a leading company in the Indian film entertainment industry and co-produces, acquires and distributes Indian language films in multiple formats worldwide.
The Class Period commences on July 28, 2017, when Eros issued a press release containing its financial results for the fiscal year 2017, ended March 31, 2017.
The complaint alleges that, on June 5, 2019, CARE Ratings, India’s second largest credit ratings agency, downgraded the credit rating for Eros’s Indian subsidiary, Eros International Media Ltd (“EIML”), to “Default” because of “ongoing delays/default in debt servicing due to slowdown in collection from debtors.” Then, on June 6, 2019, Eros issued a press release admitting that EIML was late on two loan interest payments for April and May 2019. Following this news, shares of Eros fell $3.59 or over 49% to close at $3.71 per share on June 6, 2019.
The following day, Hindenburg Research published an article entitled “Eros International: On-The-Ground Research, Employee Interviews, and Private Company Documents Expose Egregious Accounting Irregularities,” explaining the reason for the downgrade of EIML. The article stated, among other things, that “a significant portion of Eros’s receivables don’t exist” and that they have documented “multiple undisclosed related-party transactions that appear designed to hide receivables.”
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (1) Eros and its executives engaged in a scheme to use related-party transactions to fabricate receivables that they reported in Eros’s public financial disclosures; (2) because of this scheme, Eros’s financial position was weaker than what Eros disclosed; (3) consequently, EIML missed loan payments and had its credit downgraded; and (4) due to the foregoing, the defendants’ statements about Eros’s receivables, business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.