The market regulator affirmed its directives on 20 of the 25 entities involved in the Brightcom Group case.
The Securities and Exchange Board of India (Sebi) conducted an investigation into preferential issue of shares and warrants, during which it was discovered that some allottees made only partial payments, according to a report by Moneycontrol.
Later, on August 22, 2023, Sebi issued an interim order and on February 28, the market regulator issued a confirmatory order. In this order, the Whole Time Member of Sebi Ashwani Bhatia recommended referring the order to the Enforcement Directorate (ED) for further examination, as certain transactions involved foreign exchange and may violate laws related to foreign exchange dealings.
One of the directives validated relates to the regulator’s instruction to the company’s promoter and CMD, Suresh Kumar Reddy, prohibiting him from assuming any significant managerial role (KMP) in any listed company or its subsidiaries. Additionally, he is prohibited from engaging in transactions within the securities market until further notice.
“The prima facie findings that the Company financed its own preferential allotments and indulged in rounding of funds continue to support. It has clearly emerged that in the case of certain Notices, personal loan advances by them abroad to Mr. Suresh Reddy and his private companies/ units were redeemed in India through the mechanism of allotment of shares of BGL, a listed company, in preferential issues. free of charge or on partial consideration, at the expense of public shareholders of BGL,” the order stated.
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Published: 28 Feb 2024, 18:29 IST
(tagsTo Translate)SEBI