Sebi drops proceedings against Prime Focus in misleading financials case

SEBI disposed of adjudication proceedings against Prime Focus Limited and its directors, holding that allegations of misleading financial statements, accounting irregularities, and violations of listing and anti-fraud regulations were not established. The case stemmed from FY20 and FY22 transactions involving the transfer of VFX and post-production businesses to indirect subsidiaries DNEG Creative Services and DNEG India Media Services. Nine noticees, including promoter-directors Naresh Malhotra and Namit Malhotra, CFO Nishant Fadia, and independent directors, were cleared, with the regulator noting the company's accounting treatment under Ind AS 16/38 and consolidation under Ind AS 110 was correct.