The said interim order has been passed by the Securities and Exchange Board of India (SEBI) against Brightcom Group (BGL), BGL's CMD Suresh Kumar Reddy, BGL's whole time director & promoter Vijay Kancharia, BGL's independent director Yerradoddi Ramesh Reddy, and BGL's CFO Y. Srinivasa Rao.

The four individuals have been barred from selling, disposing of or diluting their shareholding in the company, directly or indirectly until further orders.

Brightcom is in the business of Ad-Tech, New Media and digital advertising and has subsidiaries and operations in various geographies including in the US, Israel, Latin America, Western Europe and Asia Pacific regions. The Company is headquartered in Hyderabad. As per the Company's Annual Report for the FY 2019-20, it has two Indian subsidiaries and 14 overseas subsidiaries.

Pursuant to receipt of certain complaints during the period October 2020 to March 2021 alleging misstatements/ irregularities in the financial statements of BGL, SEBI initiated an investigation into the affairs of the company for the period covering financial years (FYs) from 2014-15 to 2019-20, with a special focus on impairment of assets.

The securities market regulator found a number of deficiencies in the Books of Accounts and other information pertaining to the Company's foreign subsidiaries. The same mainly pertained to assets impaired in FY20 to the tune of Rs 868.30 crore.

"The scale of fraud is indeed large. The Noticees attempted to camouflage accounting entries in excess of Rs.1280 Crore during FYs 2018-19 and 2019-20 to give a distorted picture of the Company's financial position. By all yardsticks, the accounting shenanigans and dubious accounting practices, which the Noticees resorted to, were to mislead investors,” SEBI said.

In a regulatory filing made during the wee hours on Friday (April 14), BGL said: “We have taken on board the observations stated in the detailed report. Both BGL and the nominees have noted the directions offered by the Honourable SEBI. D. The company is taking legal advice with respect to the overall matter.

The company and its key officers will, respectfully, respond to the said show cause notice, about its reasons for treating the impairment charges in a particular manner, as well as on the other issues raised by the Honourable SEBI.”

In the past three years, shares of BGL have zoomed 664.9%. However, in the past one year, the stock has declined by 83% and on a year-to-date basis, the scrip has lost 49.6%.