Key Points
SEBI extends Bharat Global probe till June 30
Violations include fake disclosures and preferential share allotments
Misleading claims involved major companies' fabricated orders
SEBI restricts Bharat Global from securities trading
The market regulator has extended its investigation timeline until June 30 for further scrutiny. In December last year, SEBI issued directions against BGDL, which have now been confirmed.
The regulator found that the company created a misleading narrative about its business in design, engineering, and construction to attract investors.
SEBI’s initial probe revealed that BGDL falsely claimed to have received orders from well-known companies, including a McCain Group entity, Reliance Industries Limited, UPL Limited, and the Tata Group.
However, the investigation found that the mentioned companies never placed any such orders, and the names used by BGDL were fabricated to resemble well-established firms.
The company specifically claimed orders from McCain India Agro Private, UPL Agro Private Limited, and Tata Agro & Consumer Products.
SEBI confirmed that no such subsidiaries exist under McCain, UPL, or Tata Consumer Products Limited.
The market regulator reinforced its restrictions on BGDL, prohibiting the company from buying, selling, or dealing in the securities market.
The company and its officials are also barred from associating with SEBI-registered intermediaries or listed companies.
The regulator found that BGDL’s management had replaced its leadership and approved a preferential allotment of shares to 41 selected investors.
These actions were part of a larger scheme to manipulate stock prices. SEBI’s findings indicated that these preferential allottees profited by selling shares at artificially inflated prices, causing losses to retail investors.
Between November 1 and December 20, 2024, over 2 per cent of BGDL’s shares were offloaded at manipulated prices, significantly impacting investors.
The number of public shareholders surged from 10,129 in September to nearly 45,000 by December, even though most of these shares were controlled by a small group of allottees.
SEBI had previously noted in a temporary order that allowing BGDL shares to continue trading would put retail investors at risk, as the company’s stock price had no connection to its actual business operations.
In addition to confirming its restrictions, SEBI has now moved to impound unlawful gains made by certain individuals who received company shares through preferential allotments earlier this year.
