The Securities and Exchange Board of India (SEBI) has halted the trading of Bharat Global Developers Ltd.’s shares. and issued an interim order against the company and 47 related entities. SEBI also banned the company’s promoters from accessing capital markets until further notice. The decision came after SEBI received social media posts and complaints on December 16, 2024, regarding suspicious financial disclosures and irregularities by the company.
SEBI’s complaints revealed concerns about Bharat Global Developers misrepresenting its financial health and business activities. Allegations include inflated revenues, fabricated disclosures, and misleading information about high-value business deals. The capital markets watchdog has started a detailed investigation into the alleged fraudulent activities, with findings expected by March 2025.
Shares of Bharat Global Developers attracted attention after delivering a stunning 3,350% return in just 11 months. The stock climbed from its 52-week low of ₹49.45 in December 2023 to ₹1,702.95 in November 2024. However, the stock has recently dropped by 27% from its peak, settling at ₹1,236.45 on Friday after hitting a 5% lower circuit.
Bharat Global Developers showed no revenues, expenses, or cash flows until the financial year 2023-24. However, the March 2024 quarter suddenly reported a sharp spike in revenue and expenses. The company announced business expansions, preferential allotments, and high-value deals following a management overhaul in December 2023.
The company had announced plans for issuing bonus shares in an 8:10 ratio and conducting a stock split of 1:10. These corporate actions were scheduled for December 26, 2024. However, SEBI’s order has halted these plans.
To prevent further damage, SEBI has frozen the assets and bank accounts of all involved entities. Allegations of “pump and dump” schemes, where share prices are artificially inflated and sold for profit, are being investigated. SEBI’s focus is on understanding how financial misstatements and false disclosures contributed to the surge in share prices.
The case of Bharat Global Developers serves as a warning about the risks of market manipulation. Investors should remain cautious and rely on verified information before making investment decisions. SEBI’s prompt response underscores its dedication to safeguarding investors and upholding the integrity of the market.
