Bollywood production house Eros International has said that its audit committee has completed its internal review with regards to its UAE subsidiary revenue, amortization of intangible assets, ErosNow user count, film library and related party transactions. The company had hired US law firm Skadden, Arps, Slate, Meagher & Flom LLP to conduct the independent internal review in November 2015. Audit Committee said it remained satisfied with the company's financial reporting and disclosures in its financial statements as filed. Eros' stock went up over 5% post market hours after the audit was completed on Monday. Eros’ stock price was volatile in November 2015 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. Alpha Exposure 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. Earlier in October, Eros’ stock was downgraded by Wall Street Bank Wells Fargo. According to the investment bank, Eros’ continued increase in revenues from the UAE is unexplained. The company in its explanation said that Eros International Plc, consolidates its subsidiary financials, and cancels out all inter-company transactions between the group companies and only reports the third party revenues, costs and profitability and that analyzing subsidiary financials which in isolation can be extremely misleading. Class action suit In December 2015, San Francisco-based law firm Lieff Cabraser Heimann & Bernstein announced that it is bringing a class action…
