The sharp increase in the share price of Bharat Global, an IT hardware and global trade company has raised suspicion about alleged stock price manipulation, fraud, false disclosures and preferential share allotments triggering a probe by stock market regulator SEBI. The price of the stock surged 105 fold from `16 in Nov 2023 to `1,702 by Nov 2024. For a long time prior to this meteoric rise trading was suspended for a long time due to non payment of listing fees.
SEBI's probe showed that the preferential allotment in March 2024 was made at an issue price of `10 per share while the company's closing price on the last day of trading before the allotment was `120.10 per share. The preferential allottees in Sebi's interim order were part of a coordinated scheme to offload their shares at inflated prices. The probe showed that 19 of these preferential allottees had offloaded their shares within a short period, which translated to substantial profit of `271 crore.
The company, which was earlier known as Sequel e-routers and KKRRAFTON Developers Ltd,, announced the creation of six wholly owned subsidiaries and reported high value orders from several firms including Mccain India Agro Pvt Ltd and Reliance Industries Ltd. The company claimed to have secured a `300 crore order from McCain India Agro Pvt Ltd for supply of two lakh tonnes of Kufri Ashoka premium potatoes over six month.
It also announced a `300 crore ( later revised to `120 crore) order from Reliance Industries Ltd for the design engineering and construction of a high capacity fluidised catalytic cracker (FCC) unit which it said would be executed within six months. In December 2024, SEBI passed an interim order suspending trading in the stock due financial misrepresentation, misleading disclosures, price manipulation and offloading of shares at inflated rates.
The regulator also ordered freezing `271.6 crore in illegal gains and imposed restrictions on the company officials and preferential allottees. Bharat Global appealed to the Securities Appellate Tribunal (SAT) for permission to resume trading and said it had a new management in place. It also urged SEBI to review the profile of its new management and allow trading.
SEBI in its March 26 order declined to get into the “fit and proper” aspect but confirmed the fake disclosures and false claims by the company and the stock market regulator in its confirmatory order also said that trading could resume on April 15 subject to the company declaring provisional financial numbers for FY 24-25.
But in a new twist to the case on March 27, Bharat Global admitted in an exchange filing that it had no evidence of the massive orders it had previously announced except the one from RIL. A closer examination however reveals that the order from RIL is highly mysterious. RIL admitted placing a `155 crore order with Bharat Global and paid `65 crore upfront with an invoice raising doubts about the business links of RIL with such a “ dubious entity” and whose management consisted of unknown and “unscrupulous people.”
Mystery also surrounds the order that RIL is alleged to have placed with BGDL for a Fluidized Catalytic Cracker unit which is a key component of RIL's refinery operations. The order was supposed to be executed within six months. BGLD on December 16, 2024 announced during market hours that the project was worth `300 crore as opposed to `120 crore disclosed in the announcement made on November 7, 2024.
But on the same day (December 16, 2024) after close of market hours, BGDL disclosed that the FCC project was erroneously mentioned as `300 crore instead of `120 crore due to a human oversight. This raises serious doubts about the company's credibility and its disclosures and experts have called for a thorough probe to unravel the truth.
