At least two U.S. law firms have begun their own investigations into the business affairs of New York-listed Indian film distributor Eros International.
The company’s shares crashed by 31% on Wednesday to close at $8.25 as further allegations were made by short sellers.
Block & Leviton, a Boston-based law firm, said Thursday that it had begun conducting a probe on behalf of investors. Earlier Irvine, California based litigators Khang & Khang said it was investigating “whether the company and its officers violated securities laws by issuing misleading information to investors.”
Eros has been under attack for nearly three weeks from investors and commentators who say that the company is over-valued.
Forums and commentators have included Alpha Exposure and Market Farce. The company has twice responded with detailed rebuttals.
The allegations focus on alleged inflation of revenues, aggressive amortization policies and the potential of its Eros Now streaming service.
Last week Eros announced more than doubled revenues and earnings per share up by 64% in the first six months of the year at its majority-owned EIML offshoot which has its own share listing in Mumbai.
The shares have traded as high as $39.01 in the past 12 months.