Brightcom Group on August 27 announced major leadership changes following the regulatory crackdown by market watchdog Securities and Exchange Board of India (SEBI).
Brightcom board has accepted the resignation of Suresh Reddy, who was serving as the chairman & managing director (CMD), along with the resignation of Narayana Raju, the chief financial officer (CFO), the company said in a filing to exchanges.
The company has also proposed a transition leadership team to oversee the seamless change in leadership.
The board has also given the green light to initiate the search for a new CEO and CFO.
The development comes days after the market regulator barred the company's CMD and CFO from board positions through an interim order issued on August 22 after SEBI investigations revealed several instances of accounting irregularities and mis-statements in the financials of the company.
SEBI also found that the company fabricated bank account statements pertaining to its preferential allotment of shares. Following this, SEBI has barred Sharma and 22 other entities from selling Brightcom Group’s shares.
Also Read | SEBI stops Brightcom’s statutory auditors from engaging with company; bars CMD and CFO from Board positions
This also marked the initial instance where SEBI had to release a subsequent interim order concerning the same entity. Previously, the market regulator had issued an interim order on April 13, directed at the company as well as its Chairman and Managing Director (CMD), Suresh Kumar Reddy (who is also a noticee in the latest order) for the same allegations.
Meanwhile, shares of the Brightcom Group have also nosedived 15 percent in the past three sessions following the issuance of the interim order.
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