Capital markets regulator Sebi on Monday slapped a penalty of Rs 8 lakh on Brightcom Group for failing to make timely disclosures to stock exchanges.
The Securities and Exchange Board of India (Sebi) conducted an examination in the matter of Brightcom Group Ltd. (BGL) for the alleged violation of provisions of LODR (Listing Obligations and Disclosure Requirements) rules. Sebi initiated proceedings against BGL in the matter and issued show cause notice on May 31, 2024.
Brightcom quarterly results
In its order, Sebi observed that Brightcom had not submitted its financial results for the quarters ending September 30, 2023, and December 31, 2023. In view of the same, it was alleged that the noticee (Brightcom Group) violated the provisions of disclosure rules.
Under the Sebi norms, a listed entity will have to submit quarterly and year-to-date standalone financial results to the stock exchange within 45 days of the end of each quarter.
Brightcom violated disclosure obligation
Being a listed company, the noticee was under the obligation to ensure timely compliance and cannot do away with its responsibilities under the pretext of the resignation of various directors, KMPs, and auditors, thereby flouting disclosure rules.
The regulator's investigation also revealed that the noticee had intimated the stock exchanges with respect to the resignation of its three directors with a delay of 6 days, 4 days, and 1 day, respectively.
Also, in February this year, SEBI passed a confirmatory order in the matter of BGL. Thus, the company was required to disclose the same to the stock exchanges, however, which it had not disclosed at the time of examination.
Resignation of statutory auditors
The resignation of its KMPs and statutory auditors in July and August 2023 could not have any bearing on not making the disclosure with respect to the regulator's order, which was passed on February 28, 2024.
Had the noticee acted with due care and diligence, timely disclosures could have been made; it is further noted that the disclosure has still not been made by the noticee as of the date of this order. Thus, the violation is still continuing.
However, there was a delay on part of BGL to file the disclosures, which were not made in a timely manner and thus cannot be considered to be in compliance with the LODR rules.
