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The Enforcement Directorate (ED) has carried out searches at multiple locations in Hyderabad, including the residences of the CEO and CFO of Brightcom Group Ltd, and the premises of the company’s auditor, P Murali Mohana Rao. The searches were conducted under the provisions of FEMA, 1999, and resulted in the recovery and seizure of incriminating documents, digital devices, unaccounted cash amounting to ₹3.30 crore, and gold jewellery and bullion worth ₹9.30 crore from the auditor’s residence.
According to the ED’s official account on the X platform, the searches were part of an ongoing investigation into potential financial irregularities involving Brightcom Group Ltd. The company’s CEO and CFO are currently under scrutiny for their roles in the alleged misconduct.
Brightcom Group has been facing regulatory scrutiny for some time. In June of this year, the market regulator SEBI (Securities and Exchange Board of India) imposed fines of ₹40 lakh on Brightcom Group and its promoters for violating regulatory norms. The fines were levied after SEBI found instances of flouting insider trading norms by certain entities associated with the company.
Specifically, SEBI imposed a fine of ₹12 lakh on Geetha Kancharla, ₹6 lakh each on Vijay Kumar Kancharla HUF, Vijay Kumar Kancharla (Karta of HUF), and M Suresh Kumar Reddy (Chairperson and MD), and ₹5 lakh each on S V Rajyalaxmi Reddy and Brightcom Group Ltd (BGL). SEBI’s examination revealed trading activities in the scrip of BGL from April 2020 to August 2021 that raised questions about compliance with insider trading norms.
In a separate development, SEBI recently barred Brightcom Group’s Chief Executive Officer M Suresh Kumar Reddy and Chief Financial Officer Narayan Raju from holding directorial positions due to irregularities related to the company’s preferential share allotments. The market regulator alleged that Brightcom had engaged in manipulations in its preferential allotments and submitted forged and fabricated bank statements to cover up its actions. These actions raised doubts about the authenticity of the company’s historical financial disclosures.
In response to the developments, Brightcom Group stated that it is consulting legal experts and evaluating potential courses of action. The ongoing investigations and regulatory actions have put the spotlight on the company’s operations and management practices, impacting its standing in the market.
The outcome of the investigations and regulatory proceedings will play a crucial role in determining the future course of action for Brightcom Group and its key executives. The focus on transparency, compliance, and corporate governance is becoming increasingly important in today’s regulatory environment.
Sources By Agencies
