Two former Brightcom officials settle case with SEBI in financial reporting probe case

Two former Brightcom officials settle case with SEBI in financial reporting probe case

Market regulator Securities and Exchange Board of India (SEBI) has accepted the settlement applications of two former officials of Brightcom Group Ltd (BGL) in a case involving alleged misstatements and irregularities in the company’s financial statements for the period 2014–15 to 2019–20.

SEBI had initiated an investigation following complaints received between October 2020 and March 2021, alleging discrepancies in Brightcom’s financial disclosures. After completing the probe, the regulator issued a show cause notice on September 3, 2024, to multiple noticees, including M Manohar, former compliance officer, and M Vijaya Bhasker Reddy, former Non-Executive Independent Director and Audit Committee member. Manohar was compliance officer from 14.08.2019 to 28.10.2021 and Reddy was Non-executive independent director from 26.06.2012 to 29.09.2015.

Also read: InterGlobe Aviation board faces sharp criticism from proxy advisory firm SES over FDTL crisis

According to SEBI, Manohar failed to disclose the initiation of a forensic audit and did not ensure accurate reporting of the company’s shareholding pattern during his tenure. Reddy was accused of not ensuring that the company’s published financial statements adhered to accounting standards and presented a true and fair view.

After examining the case details and the revised proposals submitted by the applicants, the HPAC recommended the matter for settlement on the terms that Manohar and Reddy will pay Rs 12.35 lakh each as the settlement amount. Additionally, on non-monetary terms Manohar has been restrained to associate with Brightcom Group or its group companies for one year. While M Vijaya Bhasker Reddy, will be barred from associating with Brightcom Group or its group companies for two years.

Both individuals had filed separate settlement applications under SEBI’s Settlement Regulations, 2018, without admitting or denying the findings.

The settlement brings closure to the proceedings initiated under various provisions of the SEBI Act and the Securities Contracts (Regulation) Act (SCRA) against the two individuals.

Also read: Intraday position breaches will attract action on weekly expiry days starting today, F&O pre-open session also begins