The case underlines the dark side of India’s stock market boom. — Bloomberg
NEW DELHI: India’s securities market regulator on Monday suspended trading in shares of Bharat Global Developers Ltd, the latest in a string of crackdowns on companies manipulating their stock price through accounting frauds and fake disclosures.
Bharat Global falsely claimed to have won large orders from corporates such as Reliance Industries Ltd, Tata Group, McCain India Agro Pvt. and UPL Ltd, the Securities and Exchange Board of India (SEBI) said in an initial order.
Shares of the Gujarat-headquartered company surged over 10,000% in the 12-month period ending November as it announced forays into market-fancied sectors like defence, aerospace and agro technology, and then followed it up with a series of disclosures to stock exchanges about “high-value orders” from marquee corporates.
An email to an address on the company’s website by Bloomberg News seeking comment on the SEBI’s allegations remained unanswered.
The case underlines the dark side of India’s stock market boom that has seen its equity benchmarks treble since the pandemic amid a rush of small investors dazzled by impressive returns.
It also comes barely a week after the regulator tightened rules related to listing of tiny companies, a segment prone to pricing manipulation and frauds.
Prior to that, the regulator cancelled the initial public offering of Trafiksol ITS Technologies after a probe revealed a key vendor of the company to be a shell entity.
Meanwhile, the Bombay Stock Exchange on Monday deferred the bidding for Solar91 Cleantech Ltd’s initial public offering pending further examination of “certain queries raised by complainants in media”.Bharat Global had alloted about 100 million shares to 41 investors through preferential share offerings in April and August at significant discount to market price, the SEBI order showed. — Bloomberg
