The Securities and Exchange Board of India (SEBI) has suspended trading in Bharat Global Developers Ltd shares until further notice after issuing an interim order against the company and 47 associated entities. SEBI has also barred the company’s promoters from accessing capital markets as investigations continue.
The regulatory action follows complaints and social media posts flagged on December 16, 2024, alleging fraudulent financial disclosures and misleading business claims by the company. SEBIuncovered irregularities, including a dramatic spike in the company’s share price—a 3,350% surge over 11 months, peaking at ₹1,702.95 in November 2024, before dropping to ₹1,236.45, a 27% fall from its high.
The investigation revealed troubling signs of inflated share prices through a “pump-and-dump” scheme. Bharat Global Developers, once a penny stock, exhibited unprecedented gains of 12,065% in less than two years, despite reporting no revenues or cash flows until FY 2023-24. A sudden spike in revenues was claimed following a management overhaul in December 2023, coupled with announcements of business expansions, preferential allotments, and high-value deals.
Key revelations include:
Suspicious timing of announcements: The company disclosed plans to establish six subsidiaries on October 30, one day before a lock-in expiry for its preferential allotments.
Inflated order value claims: It mistakenly reported a ₹300 crore deal with Reliance Industries Ltd, later corrected to ₹120 crore.
Corporate actions halted: Proposed bonus shares and stock splits, scheduled for December 26, 2024, have been frozen.
SEBI has impounded the assets of the involved parties, frozen bank accounts, and directed a detailed investigation into the matter, targeting completion by March 2025. This crackdown highlights concerns over dubious market practices and investor safety.
