Shares of Bharat Global Developers hit a 5% lower circuit on December 23 after the Securities and Exchange Board of India (SEBI) suspended trading in the company’s stock until further notice. SEBI also imposed a permanent ban on the company’s promoters from accessing capital markets.
The action followed a December 16, 2024 complaint and social media reports alleging irregularities in the company’s financial disclosures and operations.
Unusual Stock Price Surge
The complaint highlighted an extraordinary increase in Bharat Global Developers’ share price over the past year. From ₹51.43 on December 26, 2023, the stock skyrocketed 2,304% to ₹1,236.45 by December 23, 2024. This dramatic 105-fold jump raised suspicions about the company’s financial health and activities.
Findings from SEBI’s Investigation
SEBI’s probe revealed discrepancies in Bharat Global Developers’ financial reports:
- Until FY 2023, the company reported minimal revenues, expenses, and fixed assets.
- For the March 2024 quarter, however, there was an unexpected surge in revenues and expenses.
- The changes coincided with significant events, including a management overhaul in December 2023, large preferential share allotments, and major transactions.
Additionally, on October 30, 2024, Bharat Global Developers established six new subsidiaries, just a day before the lock-in period for preferentially allotted shares ended.
Next Steps
SEBI is conducting a detailed review of the findings to ensure adherence to regulatory norms and investor protection measures.
This case highlights the importance of transparency and accountability in financial disclosures to maintain trust in the capital markets.
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Source: Moneycontrol
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