After three months of suspension, trading in shares of Bharat Global Developers (BGDL) will be allowed, but only after the company discloses key provisional financial numbers for the ongoing fiscal before April 15.
A confirmatory order of Securities & Exchange Board of India (SEBI) whole time member Ashwini Bhatia on Wednesday said two days after such dissemination, trading in shares of BGDL can resume. This comes after several investors moved the Securities Apellate Tribunal with complaints that their investments were stuck due to suspension in trading of BGDL shares.
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“It is shocking to note that a company with market capitalisation of over Rs 12,000 crore does not have the systems and processes in place to provide basic information to the regulator,” the order noted.
In its December interim order cum show-cause notice, the regulator found out that the preferential allotment in August had resulted in concentration of 99.5% of the company’s equity in the hands of 41 allottees. SEBI directed them to provide lists of their assets, co-operate with SEBI investigation and not deal in the shares of the company.
The regulator found out that the sharp rise in share price was the result of wrong disclosures and misrepresented financials. Further, the price rise was timed to benefit certain preferential allottees who offloaded shares and made huge gains.
The latest order clarified that the suspension of trades was directed to ensure that further dilution of stake of preferential allottees did not happen at the cost of innocent investors and the company did not come out with further issue of shares.
SEBI also said the suspension was important, as exchange-level surveillance methods had been unable to protect investors.
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“Another reason for suspending the trading in the scrip was to signal to the market and assure investors that the regulator would step in, in case of such egregious acts,” the order said, directing the BSE to actively monitor the nature of disclosures being made by the company, and seek disclosure of supporting documents in respect of any announcement or disclosure.
SEBI has extended the time to complete the investigation from March 31 to June 30,
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