[odysee]

I suppose we have no choice but to be cautiously optimistic about the current development. I only hope this is not a prelude to the departure of an existing board member, and the directors as disclosed post this appointment do continue to remain on the board.
It would require a particularly gutsy and supremely self-confident individual to take on the challenging and demanding role of Chief Executive Officer of this enterprise which has been in the limelight for very good performance related as well as many soul destroying wretched reasons over the last two years.
This board really does have its tasks cut out for it, and it will be a race against time to appoint well regarded statutory auditors as well as filling the key positions of CEO and CFO.
The Annual Report for 2022-23 is pending as is the AGM. There could well be an EGM if a speedy appointment has to be approved by the shareholders. But we have to get to the stage of acceptance first, be it the audit firm or any key position.
This trial by fire of all long term shareholders has been exhausting to say the least. I hope the optimism doesn’t wane. But the shoulders sag and the tail droops. I really don’t know how many of us ( 8 to 9 years and counting) still remain as fiercely positive and hopeful as we once were.
I wonder if we let ourselves down or we were let down. The end result as of now is the same.

[Logan]

I’m guessing (speculating), Mr Acharya may quit sooner or later. I think like us even he feels betrayed and backstabbed. If we observed, in all the conference calls he was very excited about the business and the future but SKR backstabbed him also.

He removed BCG from his profile and even in BCG’s website, his name was removed from management section president group strategy to just non executive director. I’m guessing even Mr Cheeti must have left after SKR’s scam came public.

There are different types of people, one type will become more proactive and take more responsibility, one will stay silent till the dust settles and the other will quit immediately (or in sometime) and will not take up responsibility.

I would’ve appreciated if Mr Acharya took up the chairman post and Mr Cheeti (or other seniors) took up the CEO post (at least interim) but we can’t do anything about that or even can’t blame them when they themselves have been betrayed and backstabbed.

I thought that SKR was not always sharp in many things (except business) but didn’t know he was this stupid and blunt. Sebi notified about forensic audit in September 2021 and still he had time to get the money from his friends (or from himself) or cancel the PW before FY22 instead of doing forgery. He could’ve said they paid later or didn’t pay (and hence cancelled) and that he lied about that earlier and that he would take the responsibility but he didn’t do any of that. He let his friends (and himself) sell all the shares for which they paid zero money and now he had to be removed by force and will forever be remembered as a fraudster, villian and a cheat who cheated and betrayed lakhs of shareholders and their family. He was so arrogant that when we asked in the conference calls about PW allottess selling all their shares he would say that he didn’t know anything about that and that he will concentrate only on business.

If the board/company doesn’t take up the responsibility and do things quickly then I think we should start thinking about forming an association and request sebi and the government to intervene and appoint a new management.

[vkhare789]

Hi Logan,

I find it hard to believe that other BOD and management would not have known about Reddy’s sins before SEBI’s show case notice. I am sure that there would have been other people involved as well.

Peshwa’s main interest is to make money through his other ventures. If he was responsible enough, he would have alteast taken a post of interim CEO but that did not happen. I agree that he may leave his current position soon and will focus on his other businesses.

I personally feel that the opportunity and responsibilities of next CEO are immense. If someone responsible can bring BCG out of this mess, he/she has a great future ahead of them. There is less to loose and more to gain for upcoming CXOs as worst is probably over now.

[Brightspot]

BCG Dividend Ex date as per NSE corporate action, i believe it has to be approved in AGM right?

BCG Brightcom Group Limited EQ Dividend – Re 0.10 Per Share 2 29-Sep-2023 30-Sep-2023 –

[Raj]

Hope the clouds are clearing..

[odysee]

The dividend cannot be paid unless the shareholders’ approval is obtained. There is no AGM or EGM planned as of now. This notice by NSE must be based on the earlier notice of dividend announcement at the Board Meeting to consider and approve the audited results for FY 22-23. And then the date of the AGM was indicated as 30th September 2023.
I’m afraid the clouds have no winds to blow them away as of now. Unless the BOD work feverishly to get things done.
But we have no one in the driver’s seat as of date.
I fear most of the old stalwarts on this forum have already bailed out as they may have well thrown in their cards after the second SCN from SEBI. I trusted and have paid a heavy price for that. I suspect Logan may be in the same boat as me. Sink, swim or continue to row the boat. That’s the choice we face today.

[odysee]

I would add that in my personal opinion, SKR’s plans and actions were unknown to other board members. That is just my gut-feel and is not based on any specific information or knowledge.

[odysee]

A small addendum. The original planned date for the AGM could well have been 29th September. Apologies as I haven’t checked the original board meeting notice even though that would have been be a simple exercise.

[Logan]

I agree with @odysee on both (1.Dividend and 2. Board members not aware of SKR’s actions).

In my opinion (maybe I’m wrong on this), from day one, SKR was the main person (and maybe the only person) who controlled the the standalone parent company and almost everyone else was either his rubber stamp (both the previous CFOs) or not involved too much in important decision making things (board members etc). I’m not sure how much he’s involved in all the subsidiaries but I suspect he was more involved in the American subsidiaries and less involved in the Israeli subsidiary (in one of the conference calls he had mentioned that he takes his salary from one of the American subsidiaries and I’m not sure which) and that’s why I said in one of my previous posts that personally, I’m at a stage where I’ll be okay with a 50-50 scenario also (50 positive and 50 negative where in atleast 50% of the revenues and profits are genuine and I’m not forcing it or expecting everyone to follow my approach).

When people do scams, they make sure that more people don’t know about it so that it won’t leak. My guess is that Mr Peshwa Acharya wouldn’t have joined BCG if he knew that SKR was doing scam. Maybe I’m wrong on this. Whoever is involved should be punished.

On different topics and control etc, the picture was clear in Ybrant/Lycos days but after Brightcom was started, it’s different. When OMS (Oridian, Israel) was acquired, it was one of the top 10 ad network companies (back then ad tech companies were called as ad networks) in the world and had a big presence in Europe. Max Interactive was also big in Australia.

Dream ad companies were also comparatively big in Latin America region and the group was the exclusive partner for Microsoft when it came to online advertising of Microsoft products.

(Ybrant was also the exclusive partner for Microsoft in our country many years back).

Many talented people like Jacob Nizri, Udi Jacobi, Gal Ekstein, Emanuel Goldschmidt, Gali Arnon etc were involved in Ybrant’s operations.

When BCG/Lycos was crashing everyday, I was very worried so I tried to check as much I could on the company and found that most of the foreign operations were genuine (like mentioned before, almost all important people had mentioned Ybrant in their profile but when Brightcom was started it was different). I’m a big fan of Philip Arthur Fisher and I’ll try to follow what he has written in his works (trying to do as much research as you can on many areas and not just checking the financials).

We can see that
Gal Ekstein has mentioned that he was the CEO of online media at Ybrant and that he was handling a team of 320 people at 16 different locations and 120 were in Israel.

Emanuel Goldschmidt has mentioned that he had handled Ybrant’s Latin America business and expanded that business there and oversaw a team of 70 people.

One person who had handled VoloMP (I don’t remember that person’s name) had mentioned that he was responsible for making more than $1.4M in profits in VoloMP (don’t know which year but it was in Ybrant days). As per audited report of VoloMP (International Expressions Inc), in 2015, the company made $2M in profits.

Mor Lubranski has mentioned that he was awarded the “Employee of the year”, chosen by Brightcom’s president out of 400 employees worldwide.

Gali Arnon had mentioned that she brought together different subsidiaries of Ybrant and merged it with Brightcom (there are articles and also interview on NDTV Profit).

My guess/speculation is that all these people built the operations and brought together everything (streamline) and that the current team is managing that.

I think SKR’s job was to listen to these people and take decisions based on their inputs and the developments happening. He played as he wanted with the parent company and not sure how much control he has/had over all the subsidiaries. My fear which I got recently is that if he played with the parent company then he could’ve played with few of the subsidiaries also.

Maybe SKR knew that he’d get caught few months back itself. I’m saying this because in one conference call he said that he or anyone from his team will make sure that BCG will become a global brand and in another call (when I asked about whether we should be worried about the future of the company and whether he and others will be removed from their posts) he said that nothing should impact the business/operations and that they have plans if anything happened. I didn’t notice and give much importance about the first one when he said it because FA report was still pending that time but now when I’m trying to piece together few things, I’m noticing those things.

I hope and pray that all of BCG’s business and subsidiaries are 100% real and SKR’s stupid actions will not affect the business and operations. Let’s pray for the best and prepare for the worst. The board should act quickly and appoint new auditors, CEO and CFO at the earliest.

[odysee]

@Logan, do not really know how to thank you enough for the superb commentary you have provided based on your painstaking study and research. It does give one pause for thought along with some sense of relief that the figures of the prominent subsidiaries could be reliable, partially or fully.
My biggest concern has been the genuineness of the revenue and financial results of the global operations post the second SCN from SEBI. At the same time I couldn’t wrap my head around the fact that Deloitte has conducted a forensic audit of six years’ accounts of all the subsidiaries which should include a very thorough scrutiny of literally every entry in the books of account and other available records. And thus far no really adverse comments are available to us via SEBI apart from the impairment issue and the accounting and treatment of development costs in the books. I just hope and pray there is no further grenade pending from SEBI that will blow up in our faces.
Wish you well and rest of the very shaken shareholder community.

[T9C]

It seems, the auditor is the main reason behind all these wrong doings.Below is my understanding based on past events.
As Ybrant Digital, the company was doing very well till 2011/12. Once they reverse merged with LGS global, all the issues were started.
This auditor was the man behind this merger and this was a failed acquisition as Ybrant had to pay to LGS more than it’s worth and they had to write off around 150 crs(don’t remember exact amount) after this merger from the books of LGS global. So Mr SKR felt he was cheated. And then this auditor suggested all these frauds to SKR.

[akkithegrt]

What I think is that if we connect the dots,SKR was trying to hide whatever he had done wrong.
1) Allotting preferential allotment to himself through x people without costing him a single penny. This gives a hint that he saw a sudden jump in the company’s revenue after COVID.
2) No one is a fool to show a fake result when a forensic audit is going on.
3) I have seen many companies results go in a downtrend when Sebi’s forensic audit was initiated.

Now to get a true view,quarter 2 results are going to be important,as no one will risk showing a fake result,so whatever results are there for quarter 2, they will come as they are.

Let’s wait, watch, and hope all investors recover their losses.

Till then, those who are at higher levels trade with the operator to minimise their losses.
Say your buying price is 100, and if you had sold at 36 and bought at 12, your actual buying price would have come to 33, and then you would have again sold it at 21. Strategies are important!Pls note that BCG has pattern,so it is not at all difficult to understand buying and selling pattern !
Rather than complaining, it is you who have to take action so that your loss is minimised.

[Logan]

Thanks @odysee.

Personally, I’m preparing for different scenarios. Like mentioned before, the main reason I stayed invested in BCG is because of its Israeli subsidiary (and also because I trusted SKR). If you have noticed, SKR was mostly right on many technological trends. He was right on AI, programmatic advertising, smartwatches, Quantum computing etc and Israel will be at the forefront in most of these (along with silicon valley). Just a month back I wouldn’t have believed the revenues and profits were fake but after SKR’s shenanigans and backstabbing shareholders, I don’t have choice but to prepare for that possibility. I don’t think all of the revenues and profits are fake because from the Ybrant days to Lycos and then to Brightcom days, there are many things which we can consider where it shows the company has genuine business and at least 50% is real. Top publishers use Brightcom’s services.

Like mentioned in my previous post, when OMS was acquired, it was one of the top 10 ad networks in the world. It had top clients and had continued to expand after Ybrant acquired it. VoloMP also has a good name in bulk email business. So I’m considering OMS and VoloMP’s revenues and profits as real so I came to the conclusion that at least 40-50% will be real. In Latin America, I’ll consider the Argentina part as real and a part of Max Interactive to real (Australia and APAC region). And since EY has audited OMS, the chances of inflating revenues and profits there are less.

These are my opinions and I’m not forcing anyone to follow the same and no one should consider it for buying or selling decisions.

[Saach]

Dear @Logan!
Very rightly said! all the points are worth to understand, deeply and to take into consideration while taking further steps to deal with handling the transactions of shares of this company. I thank you dear Mr. Logan for your communication skill with lots of analysis, every point explained systematically, in your messages. Warm regards.

[Logan]

@T9C, I don’t think it’s that simple. SKR is the main culprit here. He chose rubber stamp CFOs and a board which just agreed with him on all the decisions he took and which never questioned him. He also appointed dummy auditors. We were asking him to appoint big 4 audit firm for years but he never took that seriously because he couldn’t do whatever he wanted if he appointed them. It’s hard to assume that SKR got fooled by the auditors and I think it’s the other way around. This is not to say that the auditors are innocent, obviously they are also equally responsible but my point is SKR is the main villian here. He used the parent company to play however he wants and because of him, we are paying the price.

Look at few of his decisions and you’ll see that they were the worst. He is someone who doesn’t want to talk anything negative about him or the company yet does stupid things that bring negativity. He and promoters chose to hide their actual shareholding and kept shareholders and the market in the dark. Okay, he lost his shareholding and chose the backdoor entry option and even though we all were angry with him for doing that, he at least should’ve done it in a good way but there also he screwed up and did a scam and the company didn’t receive a single rupee for giving away crores of shares which were worth hundreds (or thousands) of crores when those shares were sold. He was aware of those shares getting sold but lied to us again saying that he didn’t know why those allottees sold their shares.

He’s a pathological liar and at the end chose to do forgery instead of admitting his actions. He betrayed and backstabbed lakhs of shareholders who believed in him and trusted him through thick and thin. Shareholders trusted him so much that they would’ve been okay if he got crores of shares for free through stock options like how other CEOs get. We would’ve gladly approved rewarding the management if they chose legal and ethical path but the path they chose can never be forgiven.

[Longplay55]

@Logan…thank you for the updates and sharing your feelings…..what my understanding is…the entire issue boils around Rs=869 Cr. of “impairment” and not fake revenue or fake profits (correct me if I am wrong)….if you closely look at PW, allotments were made in 4 different trenches (1)3cr shares @ Rs=10.00; (2)33cr shares @ Rs=7.7; (3)14cr shares @ Rs=37.7; and lastly to SS, 1.5cr shares @ Rs=37.7…..this all adds upto Rs=869/-crores; however, BCG has received peanuts in their books against all 51+crore shares allotment….I have no idea whether these 51+cr shares were entitled for bonus or not ?? If PWs are cancelled, there will be paradigm shift in BCG earning, and eventually market will give BCG its “due”….
It’s a matter of time…I guess so !

[Raj]

Bcg is out of asm stage. What’s next ? Strange things happening. Complete control of operators group..

[Longplay55]

Dear Logan ji,
Good afternoon sir, and hope you are keeping well!(healthwise)
It’s almost close to a month since your last article appeared, and I am personally feeling sort of ‘info-vaccumed’, especially after current Israel war affairs…..you had quiet optimistic views on BCG’s Israel unit business… Is it possible for you to update considering your recent studies ??? I will be highly obliged to read any business-updates (+ve /-ve) in this regard alongside rest of the boarders.
Thanking you in anticipation!

[vkhare789]

Data from morningstar. Does this mean that foreign funds/institutions are holding 10% of BCG?

Jan End
Funds – 67.87 million
Institutions – 75.87 million

Apr end
Funds – 72.81 million
Institutions – 82.75 million

May end
Funds – 70.54 million
Institutions – 79.28 million

Sep End
Funds – 94.73 million
Institutions – 108.46 million

[Longplay55]

Hello all optimistic boarders,
As per screener data, by September end, Public holding is 71.97%, FIIs @9.53%, DIIs @0.11 % and Promoter@18.38%…..so, vkhare789 ji, funds / institutional holding works out to 9.64%, i.e. close to 10%…..!

[Author]

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