Brightcom Group shares hit lower circuit after Sebi bars CEO, CFO from managerial posts

Brightcom Group Sebi Latest News: Shares of Brightcom Group hit a lower circuit immediately after the market opened on Wednesday. The stock of the company declined by Rs 1.20, or nearly 5 per cent in the opening session.

On the National Stock Exchange (NSE), shares of Brightcom Group Limited opened at Rs 23.10 apiece, 5 per cent lower than the previous close of Rs 24.30 apiece.

On the BSE, shares of Brightcom Group Limited were down 5 per cent at Rs 22.98.

Earlier on Tuesday, Sebi restrained two Brightcom Group officials, M Suresh Kumar Reddy and Narayan Raju, from holding any managerial position in the company or its subsidiaries until further orders. Reddy is the promoter-cum-Chairman and MD of Brightcom Group Ltd (BGL) while Raju is the chief financial officer. Besides, the regulator also banned Reddy from the securities market until further orders.

"It is perhaps for the first time that Sebi is resorting to issuing a second interim order for the same entity. This has been done with much thought and deliberation, considering the scale and gravity of manipulation," Sebi's whole-time member Ashwani Bhatia said in the order.

The capital markets watchdog also prohibited 23 entities, including the four promoter group entities' from disposing of shares of BGL held by them, directly or indirectly until further order.

In addition, the regulator also directed BGL to ensure that its statutory auditors, P Murali & Co and PCN & Associates, including their past and present partners, are not engaged with the company or its subsidiaries in any capacity until further order.

In its latest order, Sebi said prima facie observations and findings clearly show the manipulations carried out by BGL and other noticees, in respect of the company's preferential allotments, which involve fictitious receipts of share application money from allottees and siphoning of funds from BGL.

However, BGL has brazenly attempted to cover up its misdeeds by submitting forged and fabricated bank statements to the regulator.

Earlier, the company reported a strong quarter ended June 30, 2023 with consolidated revenues of Rs 1690.32 crores and Profit After Tax of Rs 321.47 crores for Q1 FY23-24. Consolidated revenues for Q1 rose by 14.16 per cent Y-o-Y and PAT for Q1 rose by 15.96 per cent Y-o-Y. Notably, EBITDA for Q1 also rose by 14.49 per cent Y-o-Y.