Update on EROS, Still Short

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November 20, 2015
 
Last Thursday we reported our findings of financial fraud discovered in the financial statements of Eros International Plc (NYSE: EROS).  The company has responded that short reports in the market are “baseless and misleading.”  In an effort to be fair, we reached out to both EROS and their auditor Grant Thornton India last week to get an explanation of these inaccuracies and to get a copy of the accountant’s opinion letters stating that EROS’ numbers fairly state their financial position and results of operations for each of the past 3 years.
 
We have gotten no response from either EROS or Grant Thornton.  This week, we sent a second request for those accountants’ opinion letters for the past 3 years.  Bear in mind, EROS told the investing community and the SEC in its November 2nd response to short sellers that, “Grant Thornton India LLP is the auditor of Eros International Plc who performs the audit of the Company’s consolidated financial statements, which includes its subsidiaries, in accordance with the standards of Public Company Accounting Oversight Board (United States).”
 
If that is the case, why the hesitation in releasing those opinion letters?  Even in its most recent set of financial statements issued earlier this week, EROS makes a vague reference to the Audit Committee review as being “ongoing.”  What exactly does that mean?  
 
We now even more strongly believe EROS’ financial statements do NOT accurately or fairly represent their financial position and results of operations for each of the past 3 years, and we reiterate our $4.00 price target.

Disclosure:  We are short EROS.  We do not have a financial relationship with the company.