Brightcom Group's Chairman & MD, CFO Resign Amid Regulatory Focus
Brightcom Group's Chairman and Managing Director, Suresh Reddy, and CFO, Narayana Raju, have stepped down from their positions following an order by the Securities and Exchange Board of India (Sebi) that restrains them from holding key managerial roles in any listed company. This move is in response to alleged irregularities in the allocation of warrants and shares between 2020 and 2021. The company's board recognises the importance of adhering to regulatory guidelines and plans to cooperate with relevant authorities during the transition.
To ensure business continuity, the board has suggested a transition leadership team and initiated the search for a new CEO and CFO. The company intends to issue a detailed and truthful press release in accordance with Sebi's order. Notably, Reddy held a 0.76 per cent stake in the company based on the shareholding pattern of the June quarter.
Sebi's interim order prohibits Reddy and Raju from holding directorial or key managerial roles in listed companies or their subsidiaries. Reddy additionally faces a ban from the securities market. Sebi expressed concerns that the individuals could obstruct the investigation by manipulating records.
Investor Shankar Sharma, who owns a 1.14 per cent stake in Brightcom, submitted reconciled remittance data worth Rs 56.5 crore to Sebi. He attributed the delay to pending bank reconciliation data from the company. The company, based in Hyderabad, has faced scrutiny due to accounting irregularities.
In a separate incident, Sebi previously imposed a fine of Rs 40 lakh on six entities, including Brightcom Group, for alleged violations of disclosure and code of conduct rules. The company's stock, which once reached over Rs 100, has declined and is currently trading around Rs 20, with a 5 per cent lower circuit in recent sessions.
