Brightcom Fraud of ₹500 Crore Exposed by SEBI | Stocks hit LOWER Circuits

Stock Pathshala

In the stock market, there have been a lot of scams. We have also frequently observed errors made by brokers, exchanges, and SEBI that resulted in difficulties for traders. But this time, Investors and traders suffered massive losses due to a scam hatched by its promoter.

In 2019 and 2020, Brightcom Group, a digital marketing business that was listed in 2015, generated money by issuing shares to specific organizations that were either directly or indirectly connected to Brightcom Group. A complaint was filed with SEBI regarding Brightcom and its promoter.

An inquiry was initiated against an organisation, which as they say, can open up a host of problems. SEBI uncovered a money laundering operation being conducted under the guise of investments. SEBI discovered that the entities given preferential shares had not paid the full amount for these shares. Moreover, the money that Brightcom received in exchange for share issuance was channeled back to the investing entities through a complex series of suspicious transactions.

SEBI began an investigation into 82 entities, but so far, they have only been able to partially investigate 22 of them. The scale of the scam is so substantial that SEBI has yet to complete a full investigation. As a precautionary measure, SEBI issued an order against Brightcom's chairman and managing director, Suresh Kumar Reddy, and CFO Narayan Raju. This order prohibits them from holding directorial or key managerial positions in any listed company until further notice.

It is hoped that this time, SEBI will adopt a more proactive approach to such cases and ensure justice for innocent investors.