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Eros hit by a class action lawsuit in the US for allegedly misleading investors

San Francisco-based law firm Lieff Cabraser Heimann & Bernstein announced that it is bringing a class action lawsuit against Bollywood production house Eros International on behalf of investors who purchased securities of the company. The lawsuit alleges that during the period of November 13, 2013 and November 12, 2015 that Eros made misleading statements and failed to disclose that Eros enriched its controlling family at the expense of shareholders through a series of related-party transactions. It also added: - The company lacked adequate internal controls. - Eros overstated the number of movies it distributed, its theatrical revenues , financial results and operating metrics. - The company's financial statements were not prepared in accordance with generally accepted accounting principles. Eros' stock price has been volatile over the last month following a series of articles published by US-based research firm Alpha Exposure which alleged that the company overstated its revenues and theatrical releases by stretching its amortization period. Amortization refers to the process of allocating cost to an intangible asset over a period of time. Alpha Exposure also said that by stretching the amortization period, Eros was able to reduce its costs and show higher earnings. Read more on the Alpha Exposure stories here, here and here. In November, Eros issued a statement and called the articles by Alpha Exposure "baseless." Eros did not provide any additional information on its theatrical releases. Earlier in October, Eros’ stock was downgraded by Wall Street Bank Wells Fargo. According to the investment bank, Eros’ continued increase in…

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