MUMBAI: The BSE on Monday suspended trading in the stocks of Bharat Global Developers after a Sebi investigation found that an over 10,000% rise in its price between Nov 2023 and Nov 2024 was on the back of false stock exchange disclosures that benefited only a handful of investors directly linked to the company's management. Sebi, through an interim order, has also barred several entities involved in the pump-and-dump scam from the market.
After rising from about Rs 16 in Nov 2023 to an all-time high of Rs 1,703 on Nov 28 this year, the stock on Friday had closed at Rs 1,236. It had hit the 5% lower circuit in Wednesday's and Thursday's sessions, BSE data showed.
According to Sebi's investigation report, the company changed its management in Dec 2023. Soon after, there were fresh issues of shares through the preferential offer route that eventually resulted in just 41 investors - all preferential allottees - holding 99.5% of the equity shares. These preferential allottees were marked as public shareholders and hence Sebi's shareholding norms for promoters of listed companies were not broken.
After the lock-in of shares allotted in the preferential offer ended, the company started making false disclosures to the exchanges about winning big orders from Reliance Industries, Tata Agro, UPL and McCain India. These announcements took the stock price higher that, in turn, was used by the large shareholders to offload part of their holdings. Sebi has now asked the entities named in the order to present their case to the regulator within 21 days.
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