SEBI suspends trading in Bharat Global Developers over financial misrepresentation
The Hindu
SEBI suspends trading in Bharat Global Developers for financial misrepresentation, price manipulation, and misleading disclosures.
Markets regulator Securities and Exchange Board of India (SEBI) on Monday (December 23, 2024) suspended trading in Bharat Global Developers Limited (BGDL) for financial misrepresentation, misleading disclosures, price manipulation, and offloading shares at inflated prices.
Additionally, the regulator has barred the company, its managing director Ashok Kumar Sewada, CEO Mohsin Shaikh and directors — Dinesh Kumar Sharma and Nirali Prabhatbhai Karetha — and several preferential allottees of shares among the 18 entities from the securities market.
SEBI, in its interim order, has also frozen illegal profits to the tune of ₹271.6 crore made by preferential allottees through the sale of shares.
This came after the SEBI initiated an investigation into Bharat Global Developers following social media posts and a complaint on December 16, 2024.
The inquiry was triggered by a dramatic 105-fold increase in BGDL’s share price, which surged from ₹16.14 in November 2023 to ₹1,702.95 in November 2024.
The regulator examined the matter to determine whether the company violated securities laws, including the SEBI Act, Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, and Listing Obligations and Disclosure Requirements (LODR) Regulations.
In its probe, SEBI found that BGDL replaced its management, approved preferential allotments to select individuals, and issued false disclosures about business expansion and partnerships. These actions were part of a scheme to manipulate share prices and allow insiders to sell shares at artificially high prices.
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