The regulator found irregularities in the financial statements of the company for the period between FY15 to FY20. The fines of the Market Watchdog on Allam Raghunath and Subrato Saha came after detailed research in which Sebi forensic audit of the company’s accounts carried out.
The accounting irregularities have led to an artificial inflation of headline profit for the size of RS 1,280.06 crore during Fys 2018-19 and 2019-20. Moreover, this wrong representation of things enabled the Promoter Group to load shares in BGL at bloated prices.
Today’s order was issued against a notification of the show cause on 3 September 2024 to 7 notification, including Raghunath and Saha. Sebi had searched for answers in his SCN why the punishment should not be imposed on them.
Earlier, a final order was accepted on 6 February 2025, where the supervisor ruled that BGL’s non-compliance with accounting standards resulted in the wrong representation of its financial statements for Fys 2014-15 to 2019-2020. On April 13, 2023, Sebi had accepted an interim order against the company, whereby the directors and chief financial officer (CFO) noticed that their actions had violated the securities law.
Under the charges against the company, BGL was wrongly the expenditure of the expenditure that was made during the research phase and the research cum development phase of the creation of the research phase and research phase and research phase and the establishment of the research phase and the research phase of the company, wrong. The company also turned out not to have recognized a loss of value on time with regard to its investment in a subsidiary. The Sebi Bevel also showed that Raghunath submitted false statement to BGL at the start of each financial year.
In his defense, Raghunath had said that only ‘standard officials’ can be held liable for every violation by the company and he cannot be mentioned as a ‘officer in standard’ such as defined Companies Act, 2013.
“I note that the statement in the SCN is that the cancellation did not exercise the necessary diligence as an audit member in approving the financial statements and not that he was directly responsible for the violations that are running by BGL’s. I think this statement of the notification without earning, said his statement.
Sebi also rejected Raghunath’s argument that in 2017 there was no irregularity in his appointment as an independent director in BGL.
“In the present case, the financial statements were displayed incorrectly by blowing up the profit, so that investors take a real, honest and timely assessment of the financial position of the company. Such misconduct disrupts the normal mechanism of price discovery and integrity of the securities market. That is why I find no description in the acquisition in the acquisition. Advanced, “said the order.
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