SEBI says lapses found in Brightcom's preferential issue of shares, restrains Shankar Sharma from selling firm's shares

The Securities and Exchange Board of India on Tuesday said it found lapses in Brightcom Group Ltd's preferential issue of shares. The market regulator said it received complaints about the firm's preferential allotments. 

"It was alleged that proper disclosures were not made in the Annual Report of the Company in respect of utilization of the proceeds of the preferential issues," said SEBI in its order. 

SEBI also restrained ace investor Shankar Sharma from selling shares in the company. It also restrained the company's top executives Suresh Kumar Reddy and Narayan Raju from holding any directorial positions until further notice.

Reddy is the promoter-cum-chairman and managing director of Brightcom Group, and Raju is the chief financial officer.

“Brightcom Group has brazenly attempted to cover-up its misdeeds by submitting forged and fabricated bank statements to SEBI,” SEBI Wholetime Member Ashwani Bhatia said in his interim order.

On Tuesday, Brightcom Group's scrip on BSE closed 1.2% higher at Rs 24.45.

This is perhaps the first time SEBI has issued a second interim order on the same entity.

SEBI has already issued an Interim Order-cum-Show Cause Notice to Brightcom in April, 2023. 

Apart from Sharma, the regulator also stopped 21 other entities from disposing of shares of BGL held by them, directly or indirectly, until further notice.

The order stated, “BGL has brazenly attempted to cover up its misdeeds by submitting forged and fabricated bank statements to SEBI. The blatant acts of the Company and other Noticees raise serious concerns about the affairs of the Company and also raise doubts as to whether the financial statements prepared by the Company and various disclosures made on Stock Exchange platform or in Annual Reports in the past are correct or not.”