Brightcom Group tanks 7% after Sebi refuses to lift restrictions on promoter

Shares of Brightcom Group Ltd tanked nearly 7 percent on February 29 after the Securities and Exchange Board of India (Sebi) on February 28 refused to lift restrictions imposed on the company’s promoter Suresh Kumar Reddy, in a case of irregularities in preferential allotment of shares made by the company.

Reddy will also continue to be restrained from holding the position of a director or a key managerial personnel in any listed company or its subsidiaries, said the regulator.

Sebi had issued an interim order on August 22, 2023 and, on February 28, 2024, issued a confirmatory order, confirming the directions it gave for 20 of the 25 noticees in the Brightcom Group case.

The regulator also lifted the restrictions against veteran investor Shankar Sharma of not disposing of shares of Brightcom Group held by him directly or indirectly, in any manner whatsoever, until further order.

“The prima facie findings that the Company had funded its own preferential allotments and had indulged in round tripping of funds continue to sustain. It has clearly emerged that in case of certain Noticees, personal loans advances by them abroad to Mr. Suresh Reddy and his private companies/entities were being repaid in India through the mechanism of allotment of shares of BGL, a listed company, in preferential issues for free or at partial consideration, at the cost of public shareholders of BGL,” it said.

In the confirmatory order, Sebi’s whole-time member Ashwani Bhatia suggested that the order be passed on to the Enforcement Directorate for the agency’s examination since some of the transactions involved forex and may involve violation of laws about dealing in foreign exchanges.

At 10.21am, shares of Brightcom Group traded over 4 percent lower at Rs 16.75, continuing its declining streak for the fourth consecutive session. Shares of the company have declined by over 11 percent since the start of 2024. MoneyControl