[akkithegrt]

we hope this rally will be the best rally of BCG! Hope for the best!

[Longplay55]

Some friends here, are talking about short deliveries and confusing themselves with short selling…..to the best of my knowledge, short selling (shorting) is possible only in F&O scripts, and by God’s grace BCG is not yet in F&O….. understand how impotent is promoter’s
credibility in financial markets……Inspite of such fantastic performance and results, operators are playing with it, so big investors are keeping away from BCG…..and the outcome is right in front of us….

[Brightspot]

The END of Brightcom

Attachments:

1. 

   Interim-Order-cum-Show-Cause-Notice-in-the-matter-of-Brightcom-Group-Ltd-1.pdf
   

[Logan]

Thanks @brightspot for sharing this. It’s really sad that BCG’s management still have not uploaded the same in the exchanges regarding this. They should give a clarification about this and should take all the necessary actions that sebi has suggested.

[whyShares]

Maybe the price of BCG will start going up from now.

This FA report proves that BCG’s businesses overseas are genuine and creating good revenue. Many were doubting whether these foreign companies existed.

SEBI is not questioning the revenue income of the company. It seems that BCG getting big revenue. The questions raised by the F. Audit is how they spent it and reported its profits. So being a revenue generating Company with no debts, it is a good candidate for take over by some big guns. So there is still hope.

I am not an accounting expert and it will be good if a CA can give us an opinion. Below a screen shot where the revenue income is accepted as genuine by the SEBI Auditor

Attachments:

1. 

   BCG-FA-Screenshot-1.jpg
   

[vkhare789]

Below excerpt, taken from audit report. Main objective of accounting manipulation was to take stock price higher and dump promoters shares. This is a planned fraud of top order.

“..The accounting irregularities, due
to which the Company could paint a rosy picture of its financials, can be said
to have impacted the decision-making process for all stakeholders including
public shareholders of BGL who were oblivious to such accounting
irregularities. It is also worth noting that during the investigation period, the
promoters’ shareholding in BGL decreased from 40.45% on March 31, 2014
to 13.96% on March 31, 2020 and further to 3.51% as on June 30, 2022. The
promoters thus offloaded shares at prices which were artificially propped up
by showing higher profits through accounting irregularities.
143. The abovementioned acts operated as a device/scheme to defraud the
investors in the securities market resulting in violation of Regulation 3(c), 3(d) 4(1) and 4(2)(f), (k) & (r) of SEBI (Prohibition of Fraudulent and Unfair Trade
Practices Relating to Securities Market) Regulations, 2003 [SEBI (PFUTP)
Regulations, 2003] read with12A (b) & (c) of SEBI Act, 1992….”

[vkhare789]

Reddy should be sent to jail for such a serious crime..

[vkhare789]

[T9C]

@vkhare789,
I have one observation related to your points.
As per sebi report, promoter share holding started reducing majorly from sept-2015 to 31-mar-2021. What is the bcg share price during this period? It’s almost around 10rs. Where did they pumped up the price during this period and made huge money by selling shares as mentioned in the report?
I am not supporting here promoters.Yes, they made many non disclosures but this is my observation.

[T9C]

Attached Shp reduction as per sebi report.

Attachments:

1. 

   httpsbrightcominvestors.comwp-contentuploads202304Interim-Order-cum-Show-Cause-Notice-in-the-matter-of-Brightcom-Group-L.png.png
   

[chris]

@T9C @vkhare789 what the sebi report says is both, by painting a rosy picture through wrong accounting practices, SEBI is speculating that BGL management has knowingly brought down the price slowly (instead of a vertical fall) giving them time to exit.
I got into BCG looking at the numbers, in my view ( biased ofcourse) SEBI has officially announced that the revenue is correct & has ordered BGL to disclose everything in terms of auditing subsidiaries, to shareholding issues, to disclosure of audited results of subsidiaries on the website( all that we have been requesting SKR for quite sometime now). So let us see what happens in the coming weeks.
Not a hold, buy or sell opinion by any chance. WHAT IF revenues are true (20-21,21-22, 22-23) and bcg is a debt free company, how do things play out from here.
Yes write off of assets were to BE shown in the P&L section 2018-2020 but that’s the past. How about now and the future ?

DISCLOSURE : And yes I have nothing to lose my capital has been pulled out and I’m playing with my profit only. I guess you will not see a rally like 20-21 for sure. But look at the timing as well the stock has been brought to 5 percent trading range, is it to brace for a news like this? Just thinking out aloud. Too many questions that I don’t have answers to !!!

[vkhare789]

So it was an off market transfer of shares to another party. How can they even think that it could be pledging of shares. Pledge theory was brought in to misguide and cheat investors. Those shares are sold shares and will never come back..

“….From the above, it was observed that the promoters had referred to the off
market transfers done from their Demat accounts as pledge of shares.
However, as per SEBI master circular for Depositories dated October 25,
2019, ‘…an off-market transfer of shares leads to change in ownership
and cannot be treated as pledge’. Accordingly, the submissions of the
Company were found to be untenable. In fact, there appeared to be a
deliberate attempt to disclose incorrect shareholding pattern…..”

[Logan]

BCG has shared this notification regarding the show cause notice.

Dear Sir/Ma’am,
In response to the above Show Cause Notice issued to the Company and its key officers, the
Company hereby, wishes to inform its stakeholders that:

A. The Regulator has made certain observations in this Show Cause Notice, the main
ones being:

1. The Company had taken impairment charges in its balance sheet for FY 2020,
Amounting to Rs. 868.30 crores. The honourable SEBI has observed that, as per
accounting standards, these charges should have been taken through the P & L
statement, and not through the Balance Sheet & that by taking the said (non-
cash) charges not through the P&L, the profits for that period have been
overstated.
2. The Honourable SEBI has also made observations that the shareholding pattern
of the Promoter holdings in the said period, were not rightly reported.
3. There are other observations on compliance & reporting done by the company.

B. We have taken on board the observations stated in the detailed report.

C. Both BGL (Brightcom Group Limited) 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.

E. 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.

F. The company also welcomes this opportunity to strengthen its compliance,
accounting and disclosure standards.

[Nikhilraj]

At first glance , report looked as the END of the world .. but now it feels it as the right step to corrective measures what retailers were demanding since years … Now we can get some reliable data from the company and no more dramas and confusions… All allegations against the promoters were some what known to market and seems they are already priced in ..

[Logan]

All these have happened because of the CEO’s character. He’s someone who doesn’t want to talk anything negative about his company but does things that put the company and it’s shareholders in trouble.

What could’ve been cured by a bandaid now looks like it needs a surgery. How much ever bad things have happened in the past, he’ll never learn from that and in fact finds ways to complicate easy things. The decision not to disclose the actual promoter holdings is one thing which he and other promoters had total control of and because of their negligence and careless attitude, we investors have to suffer.

If things continue this way then no serious investor will even look at the company and will laugh if the name is mentioned. The management and the promoters have to follow whatever sebi has ordered and should work hard to improve corporate governance.

[akkithegrt]

Even though revenue and profit are genuine, once a culprit is always a culprit.SRK should resign and some genuine person should take over or a company Like AFFLE should take over BCG.

If SRK resigns all the negativity from the company will go out.

[vkhare789]

I agree that negativity is already priced in for this stock. Next week, fearful retailers will try to offload shares while institutions will continue buying. Lower price levels of 10-12 can be seen however, as per my understanding, once offloading from retailers is complete, price should move upwards. Proper corrective measures in next 1-2 years can take price near to its fair value.

[vgsatwork]

I have gone through the SEBI Show cause notice in Full last night.

What most of us were speculating/Feared is what had come out in the report. That the management mislead investors w.r.t SHP and bumped up their shareholding by issuing PW to themselves. Asset impairment due to GDPR regulations – done AFTER more than a year post the company became GDPR compliant (Meaning – the impairment was done arbitarily on 31st mar 2020) shocking most of us retail investors with the sudden impairment in balance sheet and as a consequence, on the book value. They have been withholding the FA audit initiation from 16th Sep 2021 (That very same day they had a board meeting in which they decided on Preferential share allotment to SEBI approved FPI’s. The intent is clearly to pump the price as the investor sentiment/mood was positive and share prices have risen to around 30 Rs from 4-5 rupees about 9 months back). The intent here is clearly to mislead, raise equity capital in the name of acquisition (which was never meant to happen – Both Mediamint and Consumables Inc) by significantly diluting the ACTUAL holdings of the retail shareholders, while painting the picture to the world that the promoters are not going to participate in the preferential Warrants approved in Late 2020 and the Preferential allotment done in 2021. In both cases, We (retail Shareholders have been lied and mislead that the promoters indeed have 35% shareholding as of Sep 2020, while in reality they had only 1/10th of the same and mislead everyone into getting the voting for preferential warrants passed in Dec 2020) ended up losing and promoters have increased their shareholding.

There is no criminality established. Atleast not just yet. Also, the report is not questioning the Revenue numbers yet. Again, it could be because the revenue number verification may not be in the scope of forensic audit and also this is just an interim order and that the FA is not complete due to non co-operation from the BCG side in terms of not providing the documentation asked for by the forensic auditor.

Despite this damning show cause notice, i do not expect the promotor/Management to become saint/shareholder friendly given that they have been a habitual offenders and it is only a matter a time before they come up with a new trick to hoodwink everyone.

Therefore it is in our own interest that there be shareholder activism against this management and an EGM be called for to throw out the current top brass and install new set of professional managers to run the company adhering to the fiduciary duties that these roles call for.

Else, we may be fooling ourselves again..

[vgsatwork]

Also, We (Retail investors) have always been told that Daum is done deal. Looking at this show cause notice, there is nothing on the ground to indicate that it is moving anywhere close to getting resolved. Infact the Board meeting resolution in Early October last year appears to be an attempt to mislead everyone into believing that Daum is getting closed. In show cause notice, it has been mentioned that auditor interviewed SKR on that topic and he had no documents (signed/dated) to show it to them that there is a settlement deal. It is in the same board meeting resolution they have mentioned that audio company acquistion was close to being signed and SKR has been authorized by board to close the deal. It also never happened. There was no follow through as to why the asset purchase deal became a partnership without any capital investment.

Now at the end of the day, they do not have any justification left to defend all the equity capital that they have raised in the last 2-2.5 years, wherein an LOC would have sufficed. The only intent again is to increase the sharholding of the promoters at the cost of retail investors and use the equity as working capital for day to day operations…

[Brightspot]

Guys according to you impairment of no cash assets should be in P&L or part of Balance sheet
In accounting, impairment is a permanent reduction in the value of a company asset. It may be a fixed asset or an intangible asset.

When testing an asset for impairment, the total profit, cash flow, or other benefits that can be generated by the asset is periodically compared with its current book value. If the book value of the asset exceeds the future cash flow or other benefits of the asset, the difference between the two is written off, and the value of the asset declines on the company’s balance sheet.

[Author]

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