Due to "fake" announcements, this stock surged 10,000%, and it is currently under Sebi's scrutiny. Is it yours?

The Securities and Exchange Board of India noted in an initial order that Bharat Global had made fraudulent claims to have secured big orders from corporations such McCain India Agro Pvt., Tata Group, Reliance Industries Ltd., and UPL Ltd.

As the most recent in a series of actions against businesses that manipulate their stock price through accounting irregularities and false disclosures, India's securities market regulator banned trading in shares of Bharat Global Developers Ltd. on Monday.

The Securities and Exchange Board of India noted in an initial order that Bharat Global had made fraudulent claims to have secured big orders from corporations such McCain India Agro Pvt., Tata Group, Reliance Industries Ltd., and UPL Ltd.

In a single year, stocks rose more than 10,000%.
Following its announcements of forays into market-favorite sectors such as defense, aerospace, and agro technology, as well as a series of disclosures to stock exchanges regarding "high-value orders" from prominent corporates, the Gujarat-based company's shares jumped by over 10,000% in the 12-month period ending November.

Bloomberg News sent an email requesting response on the SEBI's charges to an address on the company's website, but it was not replied.

The instance highlights the negative aspects of India's stock market boom, which has seen its equities indices triple since the epidemic as a result of huge gains that have enticed a wave of tiny investors. Additionally, it occurs just one week after the regulator tightened regulations pertaining to small businesses' listing, a market that is vulnerable to pricing manipulation and frauds.

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Before that, the regulator canceled Trafiksol ITS Technologies' IPO after an investigation showed that one of the business's major vendors was a shell corporation. The initial public offering (IPO) of Solar91 Cleantech Ltd. was postponed by the BSE on Monday in order to investigate "certain queries raised by complainants in media."

According to the SEBI order, Bharat Global distributed around 100 million shares at a substantial discount to market value to 41 investors through preferential share offerings in April and August. The regulator claimed that the company's October orders were "false and misleading" and that they were timed to "benefit" share offerings investors.

After the lock-in period ended on October 31, the regulator discovered that 13 out of the 41 investors in the preferential share offering sold their holdings for 2.7 billion rupees as a result of these disclosures. The number of public share owners then increased fourfold to almost 40,000, suggesting that a large number of unwary investors purchased the shares.

"The company's material disclosures and the preferential allottees' actions seem to have been planned to sell shares in order to make enormous profits." Ashwani Bhatia, a SEBI member, stated in the directive.

Prior to the fiscal year that concluded in March 2024, Bharat Global reported relatively low revenues and earnings. Additionally, the company's shares were suspended from trading until November 2023 due to nonpayment of the listing fee to the BSE.

As a result, SEBI has prohibited a number of preferential offering investors from using the capital markets and seized their "illegal profits."