Paradise Papers: Eros International in Appleby records on Indians in Isle of Man

Toby Ward, head of the London office of Isle of Man-based law firm Dickinson Cruickshank, which later merged with Appleby, wrote an email addressed to “Jones Tim” on August 22, 2007: “We have seen a number of Indian companies using Isle of Man as a location within which to base a holding company for listing on AIM. To date 12 companies either with substantial business interests or looking to invest in India have used the Isle of Man in this way.”

The email mentioned Hirco Plc, Trinity Capital Plc, Unitech Corporate Parks Plc in property investment; Eros International Plc and UTV Motion Pictures Plc in entertainment; and Eolvence India Holdings Plc and Origo Sino-India Plc in private equity.

On September 23, 2015, Appleby employee Alicia Cain wrote in an internal email: “Eros is an Isle of Man company. Some of its shares are held by a Jersey trust. I have been providing very limited input on the Jersey trust elements, but we have not been asked to assist further for approximate 3 weeks…”

According to Appleby documents, Eros International Plc was floated as “Integrated media and entertainment group that owns and distributes Bollywood content globally in a variety of formats.” One document said EROS International Plc had a transaction value of GBP 22.5 million by placing of 15,625,000 shares at 176 p each.

The red-herring-prospectus of EROS Group stated: “Eros International Plc which is engaged in the business of producing, commissioning, distributing and exploiting films in all formats globally, was incorporated as a limited company in the Isle of Man on March 31, 2006, under the Isle of Man Companies Act, 1931. Arjan Lulla, founder of the Eros Group, is honorary life president of Eros International Plc. The promoter of it is Beech Investments Limited (Isle of Man), which holds 68.8% of the issued share capital of Eros International Plc. Ganges Trust, a fully discretionary trust, holds 66.0% of Beech, through Eros Ventures Limited, a British Virgin Islands company in which Ganges Trust holds 100.0%.

The remaining shareholding in Beech is primarily held by Ganesh Trust, another fully discretionary trust. SG Hambros Trust Company (Channel Islands) Limited, Jersey are the trustees of the fully discretionary trusts, Ganges Trust and Ganesh Trust. Arjan Lulla is one of the discretionary beneficiaries of the Ganges Trust. Eros International Plc was listed on the AIM on July 4, 2006. The ordinary shares of Eros plc are presently listed on the AIM.”

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RESPONSE

Amita Naidu, VP–PR, Eros International Media Ltd, responds: The promoter Kishore Lulla is a British Passport holder and an NRI for more than 35 years having moved out of India in the 1980s to set up international operations mainly in UK, USA, Middle East, Africa etc. for Bollywood films with Eros International group. Most of the revenues and profits of Eros International at the time also originated outside of India, hence after taking due tax advice, advisors recommended setting up an Isle of Man company to hold the business at the time of the 2006 AIM listing.

EXPLAINED: Why the Paradise Papers matter

Kishore Lulla and his family and Vijay Ahuja and his family (all NRIs) are the beneficiaries of Beech and Eros Ventures which are discretionary trusts. Arjan Lulla and Sunil Lulla are not beneficiaries and have no role to play in Beech or the trusts. Sunil Lulla is the Managing Director of the Indian listed subsidiary Eros International Media Limited. Copsale (BVI) is a wholly owned subsidiary of Eros International Media limited and there are no promoter cross holdings. Eros Group has no role to play and has no interest in the trusts.

All the proceeds were received in the company in exchange for issue of new shares and the proceeds were applied in the film business.

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Eros International Media Limited (NSE/BSE Indian listed entity) of the Group has transactions with Eros Worldwide FZ LLC (Dubai) which is a wholly owned subsidiary of Eros International Plc (Isle of Man) the ultimate holding company. These transactions related to the purchase and sale of films as film rights are exported. All the transactions are disclosed as per disclosure norms and all compliances with respect to RBI permissions and listing rules are complied with as applicable.

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