Brightcom Shares Locked In 5% Lower Circuit After SEBI Action Against CEO, CFO

Shares of Brightcom Group Ltd. fell on Wednesday after the Securities and Exchange Board of India barred its Chairman and Chief Executive Officer Suresh Kumar Reddy and its Chief Financial Officer Narayan Raju from company boards for fraud and allegedly misrepresenting the financial statements of the company.

They were also barred from disposing of the shares of the company until further notice, according to an interim order on Tuesday. SEBI has also restrained investor Shankar Sharma and 21 other entities from disposing of shares in Brightcom Group.

Shankar Sharma owns 1.14% stake in the company, as of June 30.

"We have submitted all the required reconciled remittance data to SEBI today, totaling to Rs 56.65 crore for 1.5 crore shares at Rs 37.7 per share. Delay was because of bank reconciliation data was pending from the company. We look forward to early closure of the matter," he said in a post on X.

The company's board will set up an internal team to review details and implications of the SEBI order. The committee will evaluate potential action courses to address the situation, said Brightcom Group in an exchange filing. The firm is also in consultation with legal experts to ensure all responses are in the best interest of the company and shareholders, it said.

Shares of Brightcom Group Ltd. were locked in a 5% lower circuit at Rs 23.1 apiece as of 11:18 a.m. as compared with a 0.06% advance in the NSE Nifty 50.

According to NSE data, there were no buyers for the stock and over 15.94 crore shares were pending for sale, according to the order book.

It has fallen 21.43% on a year-to-date basis. The total traded volume stood at 0.3 times its 30-day average. The relative strength index was at 40.5.