Brightcom Group shares in focus ahead of August 27 board meeting

Shares of Brightcom Group Ltd (BCG) will be in focus on Friday morning after the company scheduled a board meeting on August 27 to discuss and deliberate upon the recent developments related to an interim order issued by the Sebi. The primary agenda of the meeting would be to address the implications and courses of action in response to the interim order released by Sebi on August 22, BCG said post market hours of Thursday.

"The meeting will be held on Sunday, August 27, 2023, at the registered office of our company,” it said.

Sebi restrained 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. The markets regulator also restrained ace investor Shankar Sharma from selling shares in the company. In total, a total of 25 entities and individuals will be hit by the Sebi order.

Brightcom Group said it understands the significance of the matter and assured investors that it will diligently communicate any relevant updates following the meeting. Following the Sebi order, the stock has hit its lower circuit limits for two straight days. Earlier, BCG said it has set up a dedicated internal team to thoroughly review the details and implications. The company is evaluating potential action courses to address this situation effectively.

"We are in consultation with legal experts to ensure that all our responses are in the company's and its shareholders' best interest," Brightcom Group said.

"We fully understand that news of such nature may raise concerns among our valued shareholders, and we wish to reassure the right course of action will be taken," Brightcom Group added.

Brightcom Group had in FY21 and FY22 issued warrants/shares on preferential basis on four occasions and raised Rs 867.78 crore from a total of 82 allottees. During its investigation, Sebi delved into the receipt of warrant/share application money from some of the preferential allottees. It was observed that in respect of 22 allottees who were allotted 25,76,50,000 equity shares for Rs 245.24 crore, the company had received only Rs 52.51 crore and the remaining amount of Rs 192.73 crore was either not received by the company or was routed back to the said allottees through multiple layering of transactions involving subsidiaries and conduits.

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