Retail Investors Trapped: Brightcom Group Trading suspended by NSE, BSE from June 14

Brightcom Group shares halted from trading on NSE and BSE starting June 14, due to the company’s non-disclosure of quarterly earnings for the periods ending September 30, 2023, and December 31, 2023

Following the Securities and Exchange Board of India (Sebi) Master Circular dated July 11, 2023, which mandates compliance with Regulation 33 concerning financial result submissions, NSE suspended trading in Brightcom Group shares. The exchange stated in a recent circular that trading will resume only after the company meets regulatory requirements. Should the suspension extend beyond 15 days, trading would resume on a trade-for-trade basis in the Z category once a week for six months.

Per BSE, the suspension entails the freezing of the promoter’s entire shareholding in the non-compliant listed entity, along with any other securities held in the promoter’s demat account(s), for the duration of the suspension.

Promoters currently hold 18.38% stake in the company, while the public holds 81.62%. Among the public investors, 5.7 lakh retail investors own 37.89% stake in the company.

Vanguard, a global index major, has exposure in the company through Vanguard Total International Stock Index Fund (1.10% stake) and Vanguard Emerging Markets Stock Index Fund (1.09% stake).

LGOF Global Opportunities Fund, among Foreign Portfolio Investors (FPI) holds 2.48% stake as of December 2023. Notable individual investors include Shankar Sharma (1.14% stake) and Subrato Saha (2.02% stake)

During SEBI Investigation the Hyderabad-based company has been under SEBI’s scrutiny for over two years due to listing violations, concealing information, non-compliance, and other regulatory violations.

SEBI found that the company understated expenditures and overstated profits for five consecutive years from 2014 -15. The scale of the fraud was significant, with the company attempting to conceal accounting entries amounting to Rs 1,280 crore during the period

The company shares hit the lower circuit at Rs.12.27 on the Bombay Stock Exchange (BSE) and reached a low of Rs. 12.25 on the National Stock Exchange (NSE) on a recent trading day.