[T9C]

It’s clearly mentioned in the letter that promoters pledged their shares and it was executed and shares transferred to lenders. So I don’t expect those shares will come back. And also people are creating an impression that promoter holding will be 35% in next SHP. If it is still 18%,then make it as reason and again create negativity. Price is already down from 120 to 30 and all negatives should already be priced in. So expect promoter holding as 18% only in next SHP until they buy the remaining llps or buy shares from market.

[chris]

I think Skr should settle it once and for all, hoping it should be done in the next con call. Rest all are theories nothing is adding up to 100 percent, but the question to be asked is why the clarification wasn’t given earlier, or was it to use the negative market sentiment to get get rid of the weak hands(well I’m one of them too) by further creating more negativity.
We’ll I think fundamentally the company is doing good and in the market there is always disparity between the actual business and price action.

[Sumeshnair2005]

Dear T9c from my experience of few shares which had promoters pledging whenever ur was invoked by the lenders and sold it was always informed to exchanges as promoters sell .. I had 2-3 times this exp .. this as skr mentioned was some other arrangement with lenders where they shifted to their account but still voting rights with promoters and it may come back once they clear their debt .. otherwise if lenders invoked them and sold it will be notified to exchanges .. I hope iam correct

[m4max1979]

Hi Guys,

Could someone share the letter received from promoter/ company with regard to the shareholding pattern.

Thanks.

[Sobha]

From Twitter

[Sobha]

#brightcom #suresh_66 #brightcomgroup

It means as of 2021, the promoters actual holding was less than 2% and not as high as it was declared in the SHP. Through preferential warrants, they increased their holding percentage to 18%. It means that the promoters have bought shares pic.twitter.com/hUc8o9Q9wb

— Aryan Singhania (@AryanSi24364303) June 29, 2022

[m4max1979]

Thanks a lot Sobha.

[m4max1979]

My understanding from this letter is that the company merely removed the earlier shares pledged by the promoters from the promoters list in SHP even though the promoters hold the voting rights of those shares as per agreement.

In that case, why are they still showing 1.05 crs shares which are pledged as part of promoter group in March 2022 SHP. Assuming that they have some other agreement for these pledged shares, am I correct in assuming that the promoters actually hold around 17% pledged shares from before and around 18.47% shares as shown in March 2022 thus totaling promoter stake of around 35.47%?

If I remember correctly, the company had mentioned about promoter stake increasing to around 35% when sent notice about promoter becoming major partner in some of the LLP companies.

[Sobha]

I do remember, they mentioned 36% to be the promoter holding after acquiring the LLPs. But I couldn’t locate that letter now.

[vgsatwork]

I don’t think there is any letter or communication in the recent past from the company that implied that the promoter share holding is around 36%.

Also, the letter that is addressed to the investor cell clearly states that “various of our Shares were pledged and the same was executed through transfer of shares” – This means that an unspecified number of shares from the promoter group that were pledged were sold (No timeline specified, but it appears to be much before Jan 2021 seeing the wording of the letter) with an agreement that the voting rights of the same was retained with the promoters and hence they were being shown as owned by promoter group and not even as Pledged (since it was executed). So, plain and simple truth is that the shareholders were technically being mislead by the promoters till they got the legal opinion sometime in Q1 FY22(just as the preferential warrants were being exercised by the LLP’s and bonus were issued). In other words, the only promoter shareholding number that was reliable was the Pledged shareholding numbers, because those were not executed and continued to sit in the demat account of the promoters. This letter does not mention as to on WHAT DATE this discrepancy was corrected and informed to the exchanges? Atleast I do not remember seeing any update to the exchanges.

It is likely that the promoters were holding only about 11.73% stake (Pledged shared sitting in their demat account) whereas exercising 36.76% of voting rights(via this so called agreement wherein even though the share is not in their demat account, they continue to exercise voting rights – Legality of such move would be very dubious) as of Sep 2020 when all of a sudden they came up with a preferential warrant allotment of about 38 crore shares to all these LLP’s and we, the shareholders were discussing intensely the reason for such mass dilution of equity even as we were all expecting Line of Credit for working capital requirements.

It appears that the whole drama about bringing in additional capital is only to issue warrants to these proxies and later bring them under promoter group through indirect acquisition and shore up their shareholding to a respectable 2 digit number and avoid hostile take over by any other companies.

So, unless they bring in the remaining LLP’s into promoters fold, they are still at risk of losing the company through hostile take over bid. May be that explains the FPI and LLP holding still being significant.

[vgsatwork]

The fact that this letter to investor cell is also not being NOTIFIED through exchanges makes it all the more dubious – the claim of the promoter that the discrepancy was corrected and notified to the exchanges (We as shareholders did not see any exchange updates w.r.t this).

Also, such letter signed by unnamed authority (though it appears like SKR signature, unless it has his name and designation below, you cannot assume it to be him) in BCG letter head, leaves SKR off the hook in case of any legal trouble that arises due to the content of this letter. It’s a smart move considering that they can later on claim that clarification on shareholding were notified to the exchanges (We as shareholders yet to see this letter to notice to exchanges)

[vgsatwork]

People seeing this letter circulating through social media assume what is not being implied in this letter (That the promoters would get these shares back in their demat account). The only thing that promoters are going to get are the shareholding of the LLP’s through indirect acquisition like the one that we saw last quarter.

Also, people are spreading theories that there is 20% shareholding sitting in escrow account due to LODR regulatory requirement and that it would come back once preferential allottees make their payment. If there is such noble reason (regulatory requirement), it would have been the first thing to have been disclosed by the management voluntarily and clarified more than once that it would come back to them and there would not be any change in promoter stake.

Keeping the shareholding as mystery helps the promoters cause in avoiding hostile take over bid of the company, but is destroying shareholder value. But the promoters seems to have set their priorities very clearly to keep this SHP story as grey area as possible and as long as possible giving them time to get their stake through indirect acquisition..

[radhutheoptimist]

But… Unless there is a scope for increasing the share holding why would the promotor go for such an elaborate risky transactions. Since the share prices were less than 5 the pledge value wouldn’t be significant. The whole process took place only to increase the holding. So the end result of this operation would result in increased share holding by the promotor which is good in a way.

Hope we will come to know the actual figures by next SHP.

[vgsatwork]

I was digging through the NSE System driven disclosures – Insider Trading(PIT) report for Suresh Kumar Reddy and Vijay Kancharla. One of the first available record for SKR is as of 5th Nov 2020 and the next record is on 28th Nov 2020 and between these two dates, SKR has sold(or pledge was invoked) 26 lakh shares for 2.11 crores (Average price of 8.11 rs/share) and after this transaction, had shareholding of 1.33 crore shares left with him (including pledged shares). That is the last transaction for that quarter. But the SHP as of Dec 2020 shows SKR’s shareholding as 7.52 crores. That is a gap of 6.19 crore shares between what was being shared with the investors/public as his shareholding and what is available in the system driven disclosure – Insider Trading (PIT) report available in NSE…

Similarly for Vijay Kumar Kancharla(HUF), per this report, shareholding as of 22nd Dec 2020 is 1.89 crore shares, whereas the SHP of Dec 2020 shows the shareholding of Vijay Kumar Kancharla (HUF)as 6.2 crore shares. That is a gap of 4.39 crore shares

So, the case of missing shareholding probably goes long back, but we as shareholders were not aware of the same since the SHP did not reflect this numbers until Mar 2022 SHP that got published on 21st April 2022

[vgsatwork]

For now, what probably keeps any company from making a hostile takeover bid for brightcom is
1. LLP, FPI holdings – If they are proxies of Promoters, then very difficult to acquire bulk stake
2. The fact that there is a cloud around the company’s accounts with the Forensic Audit order by SEBI. Any company that is considering a hostile takeover attempt would have huge challenge in determining the right price to pay without having the clarity on the books of the company.

The moment the FA thing gets cleared, people can value the company properly and hence there would be an attempt for takeover. Promoter has to acquire enough stake to avoid such an issue and whatever time it takes for the same, the smoke around this may not be cleared/clarified.

[vgsatwork]

Between Dec 2019 SHP and Jun 2020 SHP, The promoter pledged share count had come down by 5.31 crore shares (From 11.53 crore pledged shares in Dec 2019 SHP to about 6.22 crore pledged shares in Jun 2020 SHP). If we assume that the Pledged share count is the only reliable shareholding in the sense that they were still within the demat account of the shareholders, (Given the claims in the investor cell letter in which the shares that were transferred out of the promoters share were also being counted and shown as promoter shares as they had voting rights based on the agreement that the promoters had with the buyers of the share) one can presume that promoters had only about 11.53 crore shares in their demat account as of Dec 2020 and it had further come down by another 5.31 crore shares by June 2020, signifying that the stake they would have had based on their demat holding would have been only about 13% and it had been reducing gradually since then. But due to the supposed agreement that they had on voting rights (Again, assuming that the content of the letter to be authentic), their SHP continued to be shown as 39.14%, that’s a whopping gap of 26%…

That means exercising 3 times the voting rights as opposed to a normal person who would only get voting in propotion to their shareholding in the demat account.

It is in this context, some of the controversial Preferential warrants of 34 crore shares to the LLP’s were approved through shareholder voting in Dec 2020….

[odysee]

That’s very good detective work @vgsatwork. Now where exactly are we headed with this?
Until we get the official SHP released by the company as of 30.6.2022 and any accompanying clarification, we may have to wait till the next conference call for for a possible detailed clarification on the math that you have so deftly conducted.
For the sake of all long term and recent investors, let us hope that the management continues to lead professionally and progressively, and the business of the company continues to be robust as per guidance, and that we all eventually prosper with our investment.
The Corporate Governance, including timely and transparent communication, of course, needs a major overhaul.

[vgsatwork]

@odysee

Promoters could have acquired all the LLP allotted shares just like the way they did acquire four of them in Mar 2022. The fact that it did not happen smoothly in Mar 2022 and subsequent price destruction (from 102 Rs on 01 April 2022 to 31.65 on 30th June 2022), seem to suggest that the remaining LLP’s may not be coming into the fold of Promoters easily and that would keep this uncertainty and price action with downward bias.

If the promoter manages to get these LLP’s back in their fold, atleast price destruction would stop. Corporate governance issue would continue to hang, which would not let the price rise back up.

Regulatory action could bring in lot of negativity in short term, but the pain would be shortlived and the issues would be cleaned up once and for all for long term price stability

[smitsat]

BCG out of ASM

[chris]

https://finshots.in/archive/weekly-wrapup-brightcom-group/

I found the article wonderful, in the sense that it was brief unbiased history of the company. Pending issues have also been raised.3 minute read clarifies a lot for new investors regarding name change and transition of the company and its business over the past decade

[Author]

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