Brightcom Group’s shares tanked on February 29 after the Securities and Exchange Board of India (SEBI) refused to lift the ban imposed on twenty of the digital marketing company’s promoters.  

Brightcom’s shares hit an intraday low of Rs 16.35, 6.84% lower than its previous closing price on the National Stock Exchange (NSE). The stock closed 1.71% lower at Rs 17.25. 

The market watchdog issued an interim order on August 22, 2023, following an investigation regarding irregularities in a preferential issue of shares and warrants, wherein some of the allottees made only partial payment. The interim order instructed the promoters not to dispose of any shares of the group they held directly or indirectly until further notice. 

On February 28, SEBI issued a confirmatory order, continuing its restrictions on 20 of the 25 noticees in the Brightcom Group case. In the order, SEBI lifted the previously imposed restrictions against veteran investor Shankar Sharma and the late Shivkrishna Harakchand Damani. 

SEBI said that the restriction imposed on Brightcom’s promoter and CMD Suresh Kumar Reddy will continue to be restrained from holding the position of a director or a key managerial personnel in any listed company or its subsidiaries.

SEBI’s whole-time member Ashwani Bhatia suggested that the Enforcement Directorate (ED) be ordered to investigate the company’s transactions and books, as some transactions involved foreign exchange and could potentially involve violation of laws governing forex transactions.