Brightcom shares tank 5% after Sebi slaps show-cause notice over accounting fraud

Shares of Brightcom Group tanked 5 percent and were locked in the lower circuit in morning trade on April 17 after the Securities and Exchange Board of India (Sebi) served it with a show-cause notice over alleged irregularities in financial accounting and non-disclosure of material information.

The market regulator said that the company overstated its profits for FY20 by understating expenditures by using irregular accounting practices. Sebi also made observations on the company’s shareholding pattern for promoter holdings in the period which, it feels, were not rightly reported. Some other observations on non-compliance were also issued.

As a result, art 10.09am, shares of Brightcom Group slipped 5 percent to Rs 14.70 on the National Stock Exchange.

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The company responded to the show-cause notice and said that it has sought legal advice in this matter.

Brightcom Group is an ad-tech company that was once considered a multibagger, thanks to its robust returns of around 627 percent over the past three years.

However, this multibagger stocks seems to have lost its shine as it has nosedived 84.64 percent over the past year and 50 percent in 2023 so far.