Shankar Sharma has taken to Twitter to rally Brightcom Group (BCG) shareholders to unite and address the ongoing issues plaguing the company. In a strongly worded tweet, Sharma requested all BCG shareholders to register on the BCG Shareholder Association website to tackle the current challenges faced by the company.
BCG has been under SEBI scrutiny for over two years for listing violations, concealing information, and other non-compliance issues. SEBI found that the company understated expenditures and overstated profits by Rs 1,280 crore over five years starting from 2014-15, indicating large-scale fraud and camouflaging of accounting entries.
In February 2024, Kallol Sen joined BCG's board, sharing impressive but suspicious financial figures. Sen's announcement on March 5, 2024, boasted a Q2 FY24 consolidated revenue of Rs 1,813 crore and a PAT of Rs 352 crore, which raised eyebrows given BCG's tumultuous history.
Also Read | Brightcom Group shares sink 5% on September quarter earnings, delayed Q3 results
Sharma commented, "For a company that's headless (I might also add, heartless), to deliver such numbers show that the company had genius at work. Or, as we suspect now, post the latest results & auditor comments, genius at fakery."
Sharma accused Sen of providing misleading and false statements, pointing out inconsistencies in the financial results. He questioned the resignation of the previous auditors and the delay in releasing financial results, suggesting a cover-up. Auditor comments revealed significant gaps in information, particularly regarding the US branch's revenue and bank statements, leading Sharma to believe the figures were fabricated.
Sharma criticised Sen's handling of the company's suspension from trading and highlighted the numerous qualifications made by auditors in the latest financial results.
Also Read | NSE to suspend trading in Brightcom Group stock, moves it to Z category
Trading Suspension and Regulatory Action
The National Stock Exchange (NSE) and BSE suspended trading of BCG shares effective Jun 14, 2024. The suspension follows the company's failure to comply with SEBI regulations requiring the submission of financial results for two consecutive quarters (September and December 2023).
The NSE circular stated, "The suspension will continue until the company complies with SEBI’s Master Circular dated July 11, 2023. After 15 days, trading will be allowed on the first trading day of each week for six months."
Additionally, the BSE announced that the promoter's shareholding would be frozen during the suspension period.
Call to Action for Shareholders and Regulatory Bodies
Sharma urged shareholders to stand together against what he termed as the "Damagement" of BCG. He called for the Ministry of Corporate Affairs and the Serious Fraud Office to step in, proposing a deep forensic audit by SEBI to uncover the truth.
Also Read | Brightcom Group final order: SEBI suggests ED probe; Shankar Sharma free to sell BGL shares
BCG's current state presents a critical test for shareholder democracy and activism in India. Sharma's rallying cry to BCG's 650,000 shareholders underscores the importance of collective action to ensure transparency and accountability, aiming to restore faith in corporate governance.
"The only thing well-organized in this company is a hatchet job on 650k shareholders," Sharma said. His message was - unified action is crucial to protect the interests of all shareholders and to demand proper governance and transparency from BCG.
SEBI lifted the restrictions against veteran investor Shankar Sharma of not disposing of BCG shares he held directly or indirectly, on Feb 28, 2024. As of March, Sharma had a 1.14 percent stake in BCG. Promoters of the company have an 18.38 percent stake in the firm.
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