Sebi lifts trading suspension on Bharat Global Developers, demands financial disclosure | Stock Market News

The Securities and Exchange Board of India (Sebi) revoked the trading suspension on the shares of Bharat Global Developers Ltd, a company listed on the BSE. The suspension imposed through an interim order of 23 December, amid concerns of fraudulent activities and misleading disclosures, will be lifted two days after the company disseminates its provisional financial numbers for FY 2024-25 on the exchange, but no later than 15 April 2025.

The suspension was revoked on 26 March after the Securities Appellate Tribunal (SAT) directed Sebi to examine the fitness of Bharat Global’s new management. While acknowledging the concerns raised in its initial interim order, Sebi noted the hardship faced by the company’s significant number of public shareholders.

“Having examined the matter, I deem it fit to decide in the interest of investors that trading in the shares of Bharat Global may resume two days after the company comes out with its provisional financial numbers and/ or key financial numbers, including sales/purchases/gross profit/net profit/net worth for the FY 2024-25, which must be disseminated on the exchange before 15 April,” stated Ashwani Bhatia, Sebi whole time member, in the order.

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This order by Sebi allows trading in Bharat Global’s shares two days after the company discloses its provisional financials, irrespective of the ongoing investigation, experts clarify. “While Sebi’s concerns over Bharat Global’s past management persist, the order prioritizes shareholder relief by lifting the suspension. This is positive news for the company, as it restores liquidity and offers investors the opportunity to trade their shares,” said Ketan Mukhija, senior partner at Burgeon Law.

The suspension of trading in BGDL shares has significantly impacted more than 60,000 public shareholders and their right to trade, said K.C. Jacob, counsel at Economic Law Practices. “But two days after the disclosure of provisional financial statements, the suspension will be revoked, providing relief to investors,” he said.

Trading suspension

The market regulator suspended trading in Bharat Global’s shares until further notice over allegations of fraudulent activities and false disclosures. The suspension followed a probe that found significant irregularities in the company’s financials and operations.

Sebi received a complaint on 16 December, alongside posts on social media, which raised concerns about Bharat Global’s financial disclosures. The BSE-listed Bharat Global saw its share price skyrocket 105 times over the past year, rising from ₹16.14 in November 2023 to ₹1,702.95 by November 2024, raising concerns of potential market manipulation.

The investigation uncovered a series of concerning developments at Bharat Global, starting with a drastic overhaul of its management in December 2023. Sebi probe found inconsistencies in the company’s financial statements.

Before 2023-24, the company had negligible revenue, expenses, and assets. However, after the management overhaul and preferential allotments, the company reported a sharp revenue increase and a significantly expanded order book despite a lack of substantiated contracts and business activities.

Sebi suspended trading in Bharat Global’s shares until further notice. The regulator also imposed restrictions on the preferential allottees, barring them from buying, selling, or dealing in any securities related to BGDL until further orders.

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In its response to Sebi, Bharat Global claimed a change in management after the interim order, stating, “Post passing of the Sebi interim order, Bharat Global immediately decided to change its Board and key personnel. It took proactive steps to re-establish the company to its core and carry out all the tasks in good faith, in the interests of public investors.”

The company also explained to Sebi why its managing director, executive director, and non-executive director were removed. However, Sebi found Bharat Global’s explanations for not providing certain information unacceptable.

“It appears that Bharat Global is trying to take cover of change of management to not provide information about the fictitious deals disclosed by it through stock exchange disclosures as alleged in the Interim Order. The company cannot be allowed to benefit on this account simply by taking this stand to subvert the investigation,” the order noted.

Preferential allottees restrained

Despite lifting the trading suspension, the preferential allottees named in the initial order remain restrained from dealing in their shares. Furthermore, the company will not be permitted to operationalize the stock split and bonus issue approved by its board and shareholders before the interim order.

Sebi also highlighted the lack of cooperation from Bharat Global in providing information about its new management, stating, “In the absence of any meaningful response from Bharat Global to Sebi’s summons, there is insufficient information before me to arrive at a conclusion regarding the fitness of the new management at this stage. The company has not provided details/resumes of the persons/KMPs actually running the company and taking decisions regarding its business and operations.”

BSE has been directed to actively monitor the company’s disclosures and seek supporting documents for any announcements. The exchange will also ensure that Bharat Global discloses its inability to produce evidence regarding earlier statements on contracts with Tata Agro & Consumer Products, UPL Agro Pvt. Ltd, and McCain India Agro Pvt. Ltd.

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Sebi has extended its investigation until 30 June 2025, emphasizing that the current order is “without prejudice to Sebi’s right to take any other action that may be initiated against the noticees in accordance with law.”

The regulator has also advised investors to exercise caution and understand the fundamentals before investing in the capital market.

At Sebi’s board meeting press conference on 24 March 2025, Bhatia stated that Sebi had prevented an estimated ₹22,000 crore in losses for investors by identifying and intervening in companies at the ‘pump’ stage of pump-and-dump schemes before they reached the ‘dump’ stage.