SEBI finds Prime Focus Limited violated securities laws through related-party transactions

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 the sale of the VFX business division to DNEG Creative Services Limited (DCSL) for ₹273.43 crore in FY 2019-20, which resulted in a gain of ₹200.27 crore.
• SEBI investigated the sale of post-production services to DNEG India Media Services Limited (DIMSL) for ₹365 crore in FY 2021-22, resulting in a gain of ₹250.20 crore.
• SEBI observed that these transactions were between entities under common control, which may have led to misstatement of financials and inflated net worth.
• SEBI noted that a significant portion of the sale consideration (₹177.58 crore) was received by Prime Focus Limited 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 proceeding under Section 15-I of the SEBI Act, with the final penalty determination pending based on the findings.

Written from the document by AI, and checked against it. The original below is authoritative.

The original document