ED Searches Brightcom’s Offices, Residences of CEO, CFO, Auditor; Findings?

Published 27-08-2023, 08:53 am
BRIH
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By Malvika Gurung

Investing.com -- The digital marketing company Brightcom Group (NS:BRIH) (BG) comes under further scrutiny as the Enforcement Directorate (ED) conducted multiple searches at its different offices as well as at the residences of the company’s top executives.

The ED carried out searches at five office locations of Brightcom Group, along with the houses of the company’s Chairman and Managing Director M. Suresh Reddy, CFO S.L.N Raju in Hyderabad, and at the residence of the company’s auditor P. Murali Mohana Rao on August 23, 2023.

During the multiple searches, the enforcement agency seized various documents, digital devices and unaccounted cash of Rs 3.3 crore, along with jewellery and bullion worth Rs 9.3 crore from auditor Rao’s house, while the residential premises of Brightcom’s CEO Reddy was also sealed.

The searches were conducted under the provisions of the Foreign Exchange Management Act (FEMA), following the investigations of the Securities and Exchange Board of India (SEBI) regarding findings of impairment of assets worth Rs 868.3 crore by the Hyderabad-based company through its subsidiaries overseas.

As per an ED release on Saturday, Brightcom Group financed the preferential issues by round-tripping funds through subsidiaries and conduit entities that the company falsely claimed to have received full payment for preferential shares and warrants by providing forged and fabricated bank statements to SEBI, PTI cited.

The company also partly siphoned off over Rs 300 crore advance as loans to subsidiaries, while statutory auditors P Murali & Co. and PCN & Associates colluded with the management and promoters of the company instead of reporting the outright fraud.

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