SEBI Suspends Trading in Bharat Global Developers Over Financial Misrepresentation

The Securities and Exchange Board of India (SEBI) has suspended trading in shares of Bharat Global Developers Ltd. This suspension will remain until further orders. SEBI’s interim order targets the company and 47 individuals for financial misrepresentation. Bharat Global Developers’ shares surged 3,350% in 11 months, attracting regulatory scrutiny.

SEBI took note of social media posts and complaints on December 16, 2024. These highlighted suspicious financials and disclosures by the company. The March 2024 quarter results showed a steep spike in revenues and expenses. Until the financial year ending 2023, the company had negligible revenue and expenses.

The company’s management underwent a significant change in December 2023. This coincided with major business activities. There were sizable preferential allotments and high-value deals. Bharat Global Developers also set up six new subsidiaries one day before the lock-in period for preferential shares ended.

SEBI’s investigation found that the company’s financial statements misrepresented its actual state. The company reported business expansion, large preferential allotments, and high-value deals post-management overhaul. The rise in shares benefited certain preferential allottees.

SEBI has also barred the company’s promoters from accessing capital markets until further orders. The regulator has impounded the unlawful gains made by the involved entities. SEBI has directed a detailed investigation into the fraudulent scheme by March 2025.

This suspension impacts the company’s market capitalization. It stood at over Rs 12,500 crore as of its previous close. The company’s shares crashed over 27% from their peak following the suspension.