Sebi gives relief to investor Shankar Sharma, 4 others in Brightcom case | India News – Business Standard

Sebi gives relief to investor Shankar Sharma, 4 others in Brightcom case | India News – Business Standard

The Securities and Exchange Board of India (Sebi) has given relief to five individuals, including renowned investor Shankar Sharma, in a matter related to alleged round-tripping of funds by Brightcom Group promoters.

In the confirmatory order issued on Wednesday, the market watchdog revoked the bar on Sharma from selling his stake in the company after he submitted details of the transactions.

Further, Sebi has also granted relief to the company’s Chief Financial Officer (CFO) Narayan Raju by changing directions on him. Sebi has barred Raju from holding any key position in the group or its subsidiaries. Earlier, he was restricted from holding key positions in any listed company or their subsidiaries.

In the confirmatory order, Sebi noted that certain personal loans by overseas residents to promoter Suresh Reddy and his private companies were being repaid in India by allotment of shares of Brightcom Group Limited (BGL) in preferential issues for free or at partial consideration, at the cost of public shareholders.

As these transactions may involve violation of laws on foreign exchange, Sebi has forwarded a copy of the order to the Enforcement Directorate (ED) for ‘appropriate action’.

On findings around how Reddy violated the promoter lock-in for shares allotted in preferential issues, Sebi said, “It appears that Reddy was advanced money against unpaid shares and by pledging them, he made money without actually paying for them.”

In an interim order issued in August, Sebi had found that the company funded its own preferential allotments and had indulged in round-tripping of funds.

Sebi had pointed out that Brightcom claimed to have advanced loans to the tune of Rs 824 crore to its subsidiaries but it only transferred Rs 350.75 crore and the remaining amount appeared to have been siphoned off.

First Published: Feb 28 2024 | 9:21 PM IST


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