I-T Department Searches VFX Major Prime Focus, Auditor & Associates Over Suspected Foreign Remittance Irregularities

Mumbai, October 7, 2026: Nitesh Tiwari’s much-anticipated cinematic epic Ramayana is in the spotlight even before its release, but for a different reason. The Income Tax (I-T) Department conducted search operations at the Prime Focus office headquartered in Mumbai. The company is popular for its visual effects and post-production services for Indian and international films. Besides the company, the search operations were carried out at the offices of its statutory auditor, MSKA & Associates LLP, in connection with suspected irregularities in foreign remittance transactions.

The searches, which began early Wednesday morning, were also conducted at the premises of certain individuals linked to Prime Focus, the sources said. In a regulatory filing in response to queries from the stock exchanges, Prime Focus confirmed that the I-T Department had initiated a search under the provisions of the Income Tax Act, 2025, at certain offices of the company.

The company said it was “fully co-operating” with the tax authorities and providing the information, documents and clarifications sought by officials.

Prime Focus’ Film Industry Presence

Prime Focus is a prominent industry player providing visual effects and post-production services for major Indian and Hollywood film projects. Through its global creative and visual effects operations, including its subsidiary DNEG, the group has been associated with several high-profile projects, including Ramayana, Kalki 2898 AD, Stree 2, Chhaava and Sky Force, as well as international productions.

The company is also associated with Nitesh Tiwari’s Ramayana: Part One, one of the most anticipated Indian films of the year. The film, starring Ranbir Kapoor and Yash, is scheduled for a Diwali release.

Foreign Remittance Transactions Under Scrutiny

The searches come amid scrutiny of foreign remittance transactions, though the company said it was not in a position to comment on the subject matter of the search as no findings or alleged violations had been communicated to it.

The development also weighed on Prime Focus’ stock price during Wednesday’s trading session. Shares of the company closed at Rs 285.05, down Rs 8.15, or 2.78 per cent, from the previous close of Rs 293.20.

The company said its business operations continued as usual and were not affected by the search. It added that it would make further disclosures to the stock exchanges regarding any material developments in accordance with applicable law.

Prime Focus has significant international operations, with the company’s investor information indicating that around 92 per cent of its revenue comes from markets outside India. This makes foreign transactions an important part of its overall business.

Probe Into Alleged Financial Irregularities

According to investigators, the latest action against the company and its chartered accountant firm stems from incriminating evidence unearthed during raids conducted last week at the premises of prominent film personalities and production entities. The latest action is understood to be part of the department’s ongoing probe into alleged tax evasion, financial irregularities and suspected overseas fund transfers, with tax officials closely examining the financial audit trail to determine the true nature and purpose of the transactions under scrutiny.

The tax scrutiny arrives at a critical juncture for the media firm, coming shortly after shareholders approved a major Rs 3,000 crore capital-raising plan. The approval was granted at Prime Focus’ 29th Annual General Meeting held on September 30, where shareholders passed enabling resolutions authorising the board to raise the funds.

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Searches Continue

The Income Tax Department’s searches are currently underway, and more details are awaited regarding the nature of the transactions under scrutiny. At present, there has been no official statement establishing any wrongdoing by Prime Focus or the individuals whose premises are being searched.

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