TWO INDEPENDENT DIRECTORS OF BRIGHTCOM GROUP LTD HAVE BEEN PENALIZED ₹35 LAKHS FAILING TO DISCHARGE THEIR DUTIES AS INDEPENDENT DIRECTORS.

 TWO INDEPENDENT DIRECTORS OF BRIGHTCOM GROUP LTD HAVE BEEN PENALIZED  ₹35 LAKHS FAILING TO DISCHARGE THEIR DUTIES AS INDEPENDENT DIRECTORS.

SEBI

SEBI has indeed penalized two former non-executive, Independent Directors of Brightcom Group Ltd (BGL) for failing to discharge their duties, specifically related to accounting irregularities.

FAILURE ON INDEPENDENT DIRECTORS

1.Allam Raghunath (Former Independent Director and Audit Committee Chairman) fined ₹30 LAKHS

2.Subrato Saha (Former Independent Director) ) fined ₹5 LAKHS

REASON FOR PENALTY

Failure to exercise due diligence and oversight, which allowed significantmisrepresentation of BGL's financial statements (FY 2014-15 to FY 2019-20).

NATURE OF IRREGULARITIES:

1.The probe revealed the company overstated its profits by an estimated ₹1,280 crore  over FY 2018-19 and FY 2019-20 through improper accounting practices, such as incorrect capitalization of R&D costs and delayed recognition of impairment losses.

2.SEBI observed that the directors failed to exercise adequate oversight over the company’s financial reporting and governance practices, particularly in relation to material misstatements and lapses in disclosure.

3.They were found to have failed to identify misrepresented financial statements by inflating profits, thereby depriving investors of a true, fair, and timely assessment of the company’s financial position.

LOSS OF INDEPENDENCE BY ONE INDEPENDENT DIRECTOR

𝐢𝐭 𝐰𝐚𝐬 𝐚𝐥𝐬𝐨 𝐞𝐬𝐭𝐚𝐛𝐥𝐢𝐬𝐡𝐞𝐝 𝐭𝐡𝐚𝐭 𝐨𝐧𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐈𝐃𝐬 𝐡𝐚𝐝 𝐥𝐨𝐬𝐭 𝐡𝐢𝐬 𝐢𝐧𝐝𝐞𝐩𝐞𝐧𝐝𝐞𝐧𝐜𝐞 𝐚𝐬 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐝 𝐮𝐧𝐝𝐞𝐫 𝐭𝐡𝐞 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬.

𝐇𝐢𝐬 𝐝𝐚𝐮𝐠𝐡𝐭𝐞r 𝐡𝐚𝐝 𝐰𝐨𝐫𝐤𝐞𝐝 𝐰𝐢𝐭𝐡 𝐭𝐡𝐞 𝐜𝐨𝐦𝐩𝐚𝐧𝐲’𝐬 𝐬𝐮𝐛𝐬𝐢𝐝𝐢𝐚𝐫𝐲, 𝐢𝐧𝐢𝐭𝐢𝐚𝐥𝐥𝐲 𝐚𝐬 𝐚𝐧 𝐢𝐧𝐭𝐞𝐫𝐧 𝐚𝐧𝐝 𝐥𝐚𝐭𝐞𝐫 𝐚𝐬 𝐚 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐀𝐧𝐚𝐥𝐲𝐬𝐭.

𝐓𝐡𝐢𝐬 𝐚𝐬𝐬𝐨𝐜𝐢𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞𝐝 𝐚 𝐜𝐨𝐧𝐟𝐥𝐢𝐜𝐭 𝐨𝐟 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐚𝐧𝐝 𝐜𝐨𝐦𝐩𝐫𝐨𝐦𝐢𝐬𝐞𝐝 𝐡𝐢𝐬 𝐢𝐧𝐝𝐞𝐩𝐞𝐧𝐝𝐞𝐧𝐜𝐞. 𝐃𝐮𝐫𝐢𝐧𝐠 𝐭𝐡𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐠𝐚𝐭𝐢𝐨𝐧, 𝐭𝐡𝐞 𝐀𝐝𝐣𝐮𝐝𝐢𝐜𝐚𝐭𝐢𝐧𝐠 𝐎𝐟𝐟𝐢𝐜𝐞𝐫 (𝐀𝐎) 𝐯𝐞𝐫𝐢𝐟𝐢𝐞𝐝 𝐭𝐡𝐞 𝐝𝐚𝐮𝐠𝐡𝐭𝐞𝐫’𝐬 𝐋𝐢𝐧𝐤𝐞𝐝𝐈𝐧 𝐩𝐫𝐨𝐟𝐢𝐥𝐞, 𝐰𝐡𝐢𝐜𝐡 𝐜𝐨𝐧𝐟𝐢𝐫𝐦𝐞𝐝 𝐡𝐞𝐫 𝐞𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 𝐰𝐢𝐭𝐡 𝐭𝐡𝐞 𝐬𝐮𝐛𝐬𝐢𝐝𝐢𝐚𝐫𝐲.

KEY TAKEAWAYS

The order underscores SEBI’s emphasis on accountability and due diligence among independent directors, reaffirming that their role is not merely advisory but involves active monitoring of corporate governance standards.

R V SECKAR , FCS ,LLB 79047 19295