Confirming its interim directions against 20 entities in the Brightcom Group Ltd (BGL) matter, the Securities and Exchange Board of India (SEBI) suggested an examination and action if required by the directorate of enforcement (ED) in the settlement of loans advanced to M Suresh Kumar Reddy, former chairman and managing director (CMD) and his companies abroad through allotment of shares in India.
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After finding Brightcom Group Ltd (BGL), its promoter, chairman and managing director (CMD) M Suresh Kumar Reddy and chief financial officer (CFO) Narayan Raju were involved in round-tripping of BGL s own funds in a circular fashion to falsely portray receipt of consideration from allottees of preferential allotments and siphoning off of proceeds of preferential allotments, Securities and Exchange Board of India (SEBI) barred top executives of the company as well as investor Shankar Sharma from offloading or disposing of their shareholding in the company.
The unprecedented second interim order of the market regulator against the Brightcom Group Ltd (Brightcom) on 22nd August had no surprises for discerning investors, analysts or commentators. It is a bit like Byju’s—everybody had seen it coming for over a year.