SEBI finds Prime Focus sold VFX division to DCSL under common control

This order addresses SEBI's investigation into Prime Focus Limited and its officials for alleged violations of securities laws and accounting standards related to the sale of business divisions to subsidiaries under common control between FY 2019-20 and FY 2021-22.

Prime Focus Limited, Naresh Malhotra, Namit Malhotra, Ramakrishnan Sankaranarayanan, Nishant Avinash Fadia, Rivkaran Singh Chadha, Kodi Raghavan Srinivasan, Padmanabha Gopal Aiyar, and Samu Devarajan.

• SEBI investigated alleged failures to comply with PFUTP Regulations, LODR Regulations, and applicable Accounting Standards (IndAS).
• SEBI observed that PFL sold its VFX business division to DCSL (an indirect subsidiary) for ₹273.43 Crore in FY 2019-20, resulting in a gain of ₹200.27 Crore.
• SEBI observed that PFL sold its post-production services business to DIMSL (an indirect subsidiary) for ₹365 Crore in FY 2021-22, resulting in a gain of ₹250.20 Crore.
• SEBI noted that these transactions involved entities under common control, which may require specific accounting treatment under IndAS 103.
• SEBI observed that a significant portion of the sale consideration (₹177.58 Crore) was received after the initiation of the SEBI investigation.
• The Noticees filed a settlement application which was rejected by SEBI on March 11, 2026.
• The order is an Adjudication Order passed by the Adjudicating Officer under Section 15-I of the SEBI Act.

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