Brightcom shares tank 7% after Sebi's confirmatory order; Shankar Sharma now free to sell stock

Shares of Brightcom Group Ltd (BCG) cracked about 7 per cent during the trading session Thursday after Sebi's confirmatory order on 20 of the 25 noticees against the company. In its order, Sebi has suggested the Enforcement Directorate (ED) should investigate some transactions and books of the company. The Securities and Exchange Board of India (Sebi) had investigated a preferential issue of shares and warrants, wherein some of the allottees made only partial payment, and the regulator had issued an interim order dated August 22, 2023. The capital markets watchdog issued the confirmatory order on February 28, 2024. In its order, Sebi's Whole-time Member Ashwani Bhatia suggested referring the order to the Enforcement Directorate (ED) for additional scrutiny, as some transactions implicated foreign exchange and could potentially violate laws governing foreign exchange transactions. Following Sebi's order, shares of Brightcom tumbled about 6.85 per cent to Rs 16.36 on Thursday, with its market capitalization slipping below Rs 3,400 crore mark. The scrip had previously settled at Rs 17.56 in the previous trading session on Wednesday. Restrictions previously imposed on veteran investor Shankar Sharma and the late Shivkrishna Harakchand Damani have been lifted. In the interim directive, Sharma and others were instructed not to sell any shares of BGL in their possession, either directly or indirectly, until further notice. With the issuance of this confirming order, the restriction has been lifted. The company's promoter and CMD Suresh Kumar Reddy has been barred by the markets regulator from holding any key managerial position (KMP) in any listed company or its subsidiaries and from dealing in securities market until further orders.