Interim Order in the matter of Preferential Allotments by Brightcom Group Limited

Under Sections 11(1), 11(4) and 11B(1) of the Securities and Exchange Board of India Act, 1992

In respect of: SL. No. NOTICEE(S) PAN 1 Brightcom Group Ltd. AAACL5827B 2 M. Suresh Kumar Reddy AOOPM8696J 3 Narayan Raju BHCPS1066C 4 Sarita Commosales LLP ACPFS8147K 5 Kalpana Commosales LLP AAOFK4643H 6 Sahitay Commosales LLP ACPFS8674P 7 Shalini Sales LLP ACQFS7055M 8 Aradhana Commosales LLP ABAFA4710C 9 Palace Heights Avenues LLP AAYFP6825C 10 Kishan Prakash EHPPK4211P 11 Ishan Prakash AFCPI7012P 12 P Bhuvaneswari CGSPP5043C 13 Hansraj Commosales LLP AAJFH1152J 14 MLS Sudheer BGTPS2091F 15 Subrato Saha AFOPS1470F 16 Manju Shivkrishna Damani AABPD2302H 17 Varun Shivkrishna Damani AABPD2303G 18 Prerna Varun Damani BVCPD5290F 19 Pooja Rajendra Prasad Poddar AELPP6414L 20 Rajendra Prasad Poddar AFGPP6361J 21 Sushila Devi Poddar AFUPP5188B

Interim Order in the matter of Brightcom Group Ltd.

SL. No. NOTICEE(S) PAN 22 Ankit Kumar Alya AKNPA3149D 23 Sanjib Hirendra Chakraborty AHPPC8755N 24 Shivkrishna Harakchand Damani AABPD2300F 25 Shankar Sharma AMGPS6103C (The aforesaid entities are hereinafter individually referred to by their respective names / Noticee no. and collectively as “Noticees”, unless the context specifies otherwise)

In the matter of Brightcom Group Limited

Background: 1. SEBI received complaints dated October 06, 2022 and May 12, 2023 in respect of the preferential allotments made by Brightcom Group Limited (hereinafter referred to as “BGL” or “Brightcom” or “the Company”) in the Financial Years (FY) 2019-20 and 2020-21, alleging inter alia that BGL had raised money through preferential issue of shares to entities that were directly or indirectly connected to it and that the money raised in the preferential issues was given as loans and advances to its subsidiaries. It was further alleged that proper disclosures were not made in the Annual Report of the Company in respect of utilization of the proceeds of the preferential issues. 2. SEBI decided to conduct a detailed investigation in the matter. The preliminary findings of the investigation prima-facie indicated irregularities in the preferential allotments by BGL which included circulation of funds to create false impression of receipt of warrant / share application money, partial return of warrant / share application money, allotment of warrants / shares without receipt or partial receipt of warrant / share application money, diversion of proceeds of preferential allotments of warrants / shares, submission of false/ fabricated documents (bank accounts statements) to SEBI, etc. These actions of BGL resulted in significant misstatements / misrepresentations in the financial statements of the Company and its subsidiaries. The preliminary findings of the investigation are detailed below:

Preferential Issues by BGL: 3. It was observed that during FY 2020-21 & 2021-22, BGL had issued warrants / share on preferential basis on four occasions and raised Rs. 867.78 Crore from a total of 82 allottees. A summary of the four preferential issues is given below: Table 1 Allotment Amount Sl. No. of No. of Equity Allotment price (Rs.) Received Remarks No. Allottees Shares dates [FV Rs. 2/-] (Rs. Crores) 1 3 3,14,00,000 10 31.40 27/05/2020 Issue of equity shares 01/07/2021 to Conversion of warrants into 2 50 32,56,55,000 250.75 7.70 12/08/2021 equity shares 23/01/2022 to 3 28 14,00,50,000 37.77 528.97 Issue of equity shares 25/01/2022 Conversion of warrants into 4 1 1,50,00,000 56.66 09/03/2022 37.77 equity shares Total 82 51,21,05,000 867.78

4. It was observed that during the first preferential issue, the Company allotted 3,14,00,000 equity shares to three non-promoter entities at Rs.10 per share on May 27, 2020, which were subsequently listed on the exchanges on July 24, 2020. 5. During the second preferential issue, the Company allotted warrants to 50 entities, who were required to pay 25% of the issue price at the time of issuance of warrants and 75% at the time of conversion. Such Warrants were to be converted to equity within 18 months by the warrant holders. These warrant holders subsequently converted 32,56,55,000 warrants into equity shares, which were listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). Their details of the allotments are as under: Table 2 Sl. Date of Price per No. of Equity Shares Effective date No. of Amount No. allotment share issued/Warrants of Listing Allottees Received (Rs.) converted 1 July 1, 2021 20 7.7 3,42,00,000 26,33,40,000 August 11, 2021 2 July 23, 2021 16 7.7 5,89,30,000 45,37,61,000 August 23, 2021 3 July 28, 2021 8 7.7 14,55,00,000 1,12,03,50,000 August 25, 2021 4 July 30, 2021 5 7.7 8,32,00,000 64,06,40,000 August 26, 2021 5 August 12, 2021 1 7.7 38,25,000 2,94,52,500 August 26, 2021 Total 50 32,56,55,000 2,50,75,43,500

6. During the third preferential issue, the Company, during the period January 23-25, 2022, allotted 14,00,50,000 equity shares to 28 non-promoters at Rs.37.77 per share, which were subsequently listed on the exchanges on April 01, 2022. 7. In the fourth and last preferential issue, 1,50,00,000 warrants were allotted to Mr. Shankar Sharma at Rs.37.77 per warrant, which were converted into equity shares on March 09, 2022 and listed on the Exchanges on April 19, 2022. Non-receipt of warrant / share application money by the Company 8. During the investigation, SEBI delved into the receipt of warrant / share application money from some of the preferential allottees. It was observed that in respect of 22 allottees who were allotted 25,76,50,000 equity shares for Rs.245.24 Crore, the Company had received only Rs.52.51 Crore and the remaining amount of Rs.192.73 Crore was either not received by the Company or was routed back to the said allottees through multiple layering of transactions involving subsidiaries and conduits. A summary of the said shortfall, entity-wise, is provided below: Table 3 Amount actually No. of Total Date of Allotmen received Shortfall S. Name of Shares Amount Allotme PAN t Price by the (Rs. in No. Allottee allotted (Rs. in nt (Rs.) BGL Crores) ( FV 2) Crores) (Rs. in Crores) Aradhana July 30, 1 ABAFA4710C Commosales 5,00,00,000 7.70 38.50 2.41 36.09 2021 LLP Sarita July 28, 2 ACPFS8147K Commosales 5,00,00,000 7.70 38.50 0.03 38.47 2021 LLP Kalpana July 28, 3 AAOFK4643H Commosales 2,50,00,000 7.70 19.25 0.00 19.25 2021 LLP July 28, 4 ACQFS7055M Shalini Sales LLP 2,00,00,000 7.70 15.40 - 15.40 2021 July 30, 5 AFOPS1470F Subrato Saha 2,20,00,000 7.70 16.94 2.90 14.04 2021 July 23, Palace Heights 6 AAYFP6825C 45,00,000 7.70 3.47 - 3.47 2021 Avenues LLP Sahitay July 28, 7 ACPFS8674P Commosales 2,50,00,000 7.70 19.25 - 19.25 2021 LLP Hansraj July 28, 8 AAJFH1152J Commosales 2,40,00,000 7.70 18.48 5.25 13.23 2021 LLP

Table 3 Amount actually No. of Total Date of Allotmen received Shortfall S. Name of Shares Amount Allotme PAN t Price by the (Rs. in No. Allottee allotted (Rs. in nt (Rs.) BGL Crores) ( FV 2) Crores) (Rs. in Crores) July 1, 9 CGSPP5043C P Bhuvaneswari 4,50,000 7.70 0.35 -0.15 0.50 2021 July 23, 10 BGTPS2091F MLS Sudheer 6,00,000 7.70 0.46 - 0.46 2021 May 27, 11 EHPPK4211P Kishan Prakash 48,00,000 10.00 4.80 0.48 4.32 2020 May 27, 12 AFCPI17012P Ishan Pakash 28,00,000 10.00 2.80 1.11 1.69 2020 Manju July 1, 13 AABPD2302H Shivkrishna 10,00,000 7.70 0.77 - 0.77 2021 Damani Varun July 1, 14 AABPD2303G Shivkrishna 10,00,000 7.70 0.77 0.50 0.27 2021 Damani July 1, Prerna Varun 15 BVCPD5290F 10,00,000 7.70 0.77 - 0.77 2021 Damani July 1, Pooja Rajendra 16 AELPP6414L 10,00,000 7.70 0.77 - 0.77 2021 Prasad Poddar July 1, Rajendra Prasad 17 AFGPP6361J 10,00,000 7.70 0.77 - 0.77 2021 Poddar July 1, Sushila Devi 18 AFUPP5188B 10,00,000 7.70 0.77 - 0.77 2021 Poddar July 1, 19 AKNPA3149D Ankit Kumar Alya 40,00,000 7.70 3.08 - 3.08 2021 July 1, Sanjib Hirendra 20 AHPPC8755N 25,00,000 7.70 1.93 - 1.93 2021 Chakraborty Shivkrishna July 1, 21 AABPD2300F Harakchand 10,00,000 7.70 0.77 - 0.77 2021 Damani Mar 09, 22 AMGPS6103C Shankar Sharma 1,50,00,000 37.77 56.66 39.98 16.67 2022 Total 25,76,50,000 245.24 52.51 192.73

Fictitious receipts from 4 allottees subsequently classified as promoter entities: 9. It was found that out of the abovementioned 22 allottees, who were non-promoter entities, four allottees were subsequently categorized as promoter entities. The Company, in an announcement dated April 05, 2022 to the stock exchanges, stated that Mr. M. Suresh Kumar Reddy, Promoter and Chairman & Managing Director of BGL, was inducted as a partner in four LLPs on March 31, 2022 and consequently those four LLPs were re-classified as Promoter & Promoter Group entities effective from March 31, 2022. It was noted that all four LLPs (viz. Aradhana Commosales LLP, Sarita Commosales LLP, Kalpana Commosales LLP and Shalini Sales LLP) were preferential allottees of BGL, which are appearing at serial nos. 1 to 4 in the Table under previous paragraph. 10. It was observed that the abovementioned four LLPs were allotted 14.50 Crore shares (approximately 30% of the total shares allotted on preferential basis during FY 2020-21 & 2021-22) for a total consideration of Rs.111.65 Crore. However, it was prima facie observed that only Rs.1.41 Crore was actually received from these 4 LLPs, out of the abovementioned agreed consideration.

11. The Company was asked to provide the details of receipt of consideration money for the preferential allotment of warrants / shares from the said four LLPs. The company in its reply dated December 19, 2022 provided the details of receipt of share application money and submitted its bank statements as documentary evidence. 12. SEBI independently sought Company’s bank account statements for the same bank accounts from the concerned banks. On comparison of the bank account statements received from the Company with those received directly from the banks, it was observed that the credit entries appearing in the bank account statements submitted by the company, which were purported to be the receipts of share application money from the said 4 LLPs, did not appear in the bank account statements obtained directly from the banks. The said mis-matches are detailed below: (i) Aradhana Commosales LLP (Aradhana): 13. It was observed that Aradhana was allotted 5,00,00,000 warrants (subsequently converted into shares), each having face value of Rs.2, on July 30, 2021 at the rate of Rs.7.70 each, for a total consideration of Rs.38.50 Crore.

As per the bank statements submitted by the Company, it had received Rs.38.50 Crore from Aradhana between 03.04.2021 to 12.07.2021. However, the bank account statements obtained directly from the banks did not reflect the said transactions. The details are as under:

Table 4 Date Bank account Bank name Amount as Amount as per the No. (Company) per statement statement directly submitted by obtained from bank the company (Rs.) 03-04-2021 22522412345678 DCB Bank 1,00,00,000 No such transaction 05-04-2021 22522412345678 DCB Bank 8,62,50,000 No such transaction 21-05-2021 22522412345678 DCB Bank 10,00,00,000 No such transaction 06-07-2021 22522412345678 DCB Bank 9,00,00,000 No such transaction 12-07-2021 16050200002993 Federal Bank 9,87,50,000 No such transaction Total 38,50,00,000 14. Further, the bank account statements obtained directly from the banks showed that the Company had received Rs.2.41 Crore only from Aradhana’s ICICI Bank Account into its DCB Bank Account during the abovementioned period, details of which are as under: Table 5 Date of credit Allottee Bank Name and Name in the bank of A/c No. of BGL Bank and A/c. Amount (Rs.) the company No. of Allottee 06-04-2021 79,00,000 Aradhana DCB BANK ICICI Bank Ltd Commos 07-04-2021 75,00,000 22522412345678 641505000604 ales LLP 08-04-2021 87,00,000 Total receipt by BGL 2,41,00,000

15. The bank statements obtained directly from the banks showed that apart from the abovementioned receipt of Rs.2.41 Crore from Aradhana, the Company did not receive any other payment from Aradhana towards the allotment of 5 Crore shares of BGL. It is, therefore, clear that the Company did not receive the remaining amount of Rs.36.09 Crore (i.e. Rs.38.50 Crore – Rs.2.41 Crore) from Aradhana. 16. It was further observed that Mr. M. Suresh Kumar Reddy, had transferred Rs.76 Lakh to the ICICI Bank Account of Aradhana on March 31, 2022 from his Axis Bank Account No. 914010002169010. This payment was claimed to have been made towards becoming partner in Aradhana.

(ii) Sarita Commosales LLP (Sarita) 17. It was observed that Sarita was allotted 5,00,00,000 Warrants (subsequently converted into shares), each having face value of Rs.2, on July 28, 2021 at the rate of Rs.7.70 each, for a total consideration of Rs.38.50 Crore. As per the bank statements submitted by the Company, it had received Rs.38.50 Crores from Sarita. However, the bank account statements directly obtained from the banks did not reflect the said transactions. The details are as under: Table 6 Date Bank account Bank name Amount as per Amount as per the No. statement statement directly submitted by the obtained from bank company (Rs.) 16-07-2021 16050200002993 Federal Bank 10,00,00,000 No such transaction 27-07-2021 16050200002993 Federal Bank 10,00,50,000 No such transaction 05-04-2021 22522412345678 DCB Bank 9,62,50,000 No such transaction 02-06-2021 22522412345678 DCB Bank 8,87,00,000 No such transaction Total 38,50,00,000

18. Further, the bank account statements obtained directly from the banks showed that the Company had received Rs.4.10 Crore from Sarita, details of which are as under: Table 7 Date of credit in Allottee Bank Name and Name the bank A/c No. of BGL Bank and A/c. No. of Amount (Rs.) of the Allottee company 09-04-2021 80,00,000 09-04-2021 80,00,000 Sarita DCB BANK Catholic Syrian Bank Commosales 12-04-2021 70,00,000 22522412345678 033104307892195001 LLP 12-04-2021 90,00,000 12-04-2021 90,00,000 Total receipt by BGL 4,10,00,000

19. Sarita paid Rs.4.10 Crore only to BGL, as against the required payment of Rs.38.50 Crore. On the other hand, SEBI’s investigation has prima facie revealed that Sarita received a total of Rs.4.07 Crore from BGL, which reached Sarita through circuitous transactions involving BGL’s subsidiaries, viz. LIL Projects Pvt. Ltd. and Yreach Media Pvt. Ltd., and other conduit entities, viz. Krishna Traders, Jatan Developers etc. The table below details the aforementioned circuitous fund transactions. Table 8 From bank/ From To bank/ Bank Date Bank To entity Amount entity account No account No Brightcom DCB/22522 Yreach Media 08-Apr-21 ICICI/007605003641 90,00,000 Group Ltd. 412345678 Pvt Ltd Brightcom DCB/22522 LIL Projects 08-Apr-21 ICICI/007605004446 95,25,000 Group Ltd. 412345678 Pvt Ltd Brightcom DCB/22522 LIL Projects 12-Apr-21 ICICI/007605004446 87,00,000 Group Ltd. 412345678 Pvt Ltd Brightcom DCB/22522 LIL Projects 12-Apr-21 ICICI/007605004446 70,00,000 Group Ltd. 412345678 Pvt Ltd Brightcom DCB/22522 LIL Projects 15-Apr-21 ICICI/007605004446 10,00,000 Group Ltd. 412345678 Pvt Ltd Brightcom DCB/22522 LIL Projects 15-Apr-21 ICICI/007605004446 98,00,000 Group Ltd. 412345678 Pvt Ltd Total BGL to Subsidiaries 4,50,25,000 Yreach Jatan ICICI/0076 CSB/0331- 09-Apr-21 Media Pvt Developers 15,00,000 05003641 04261538-195001 Ltd Pvt. Ltd. Yreach Jatan ICICI/0076 CSB/0331- 09-Apr-21 Media Pvt Developers 20,00,000 05003641 04261538-195001 Ltd Pvt. Ltd. Yreach Jatan ICICI/0076 CSB/0331- 09-Apr-21 Media Pvt Developers 20,00,000 05003641 04261538-195001 Ltd Pvt. Ltd. Yreach Jatan ICICI/0076 CSB/0331- 09-Apr-21 Media Pvt Developers 20,00,000 05003641 04261538-195001 Ltd Pvt. Ltd. LIL Jatan ICICI/0076 CSB/0331- 09-Apr-21 Projects Developers 95,00,000 05004446 04261538-195001 Pvt Ltd Pvt. Ltd. LIL ICICI/0076 Krishna CSB/0331- 12-Apr-21 Projects 70,00,000 05004446 Traders 04266068-195001 Pvt Ltd LIL ICICI/0076 Krishna CSB/0331- 12-Apr-21 Projects 70,00,000 05004446 Traders 04266068-195001 Pvt Ltd LIL ICICI/0076 Krishna CSB/0331- 15-Apr-21 Projects 10,00,000 05004446 Traders 04266068-195001 Pvt Ltd LIL ICICI/0076 Krishna CSB/0331- 15-Apr-21 Projects 98,00,000 05004446 Traders 04266068-195001 Pvt Ltd Total Subsidiaries to Conduit entities 4,18,00,000 Jatan CSB/0331- Sarita CSB/0331- 09-Apr-21 Developers 04261538- Commosales 1,60,00,000 04307892-195001 Pvt Ltd. 195001 LLP Jatan CSB/0331- Sarita CSB/0331- 12-Apr-21 Developers 04261538- Commosales 2,00,000 04307892-195001 Pvt Ltd. 195001 LLP

From bank/ From To bank/ Bank Date Bank To entity Amount entity account No account No CSB/0331- Sarita Krishna CSB/0331- 12-Apr-21 04266068- Commosales 70,00,000 Traders 04307892-195001 195001 LLP CSB/0331- Sarita Krishna CSB/0331- 12-Apr-21 04266068- Commosales 70,00,000 Traders 04307892-195001 195001 LLP CSB/0331- Sarita Krishna CSB/0331- 15-Apr-21 04266068- Commosales 1,05,00,000 Traders 04307892-195001 195001 LLP Total Conduit entities to Allottee 4,07,00,000 SARITA CSB/0331- Brightcom DCB/225224123456 09-Apr-21 COMMOS 04307892- 80,00,000 Group Ltd. 78 ALES LLP 195001 SARITA CSB/0331- Brightcom DCB/225224123456 09-Apr-21 COMMOS 04307892- 80,00,000 Group Ltd. 78 ALES LLP 195001 SARITA CSB/0331- Brightcom DCB/225224123456 12-Apr-21 COMMOS 04307892- 70,00,000 Group Ltd. 78 ALES LLP 195001 SARITA CSB/0331- Brightcom DCB/225224123456 12-Apr-21 COMMOS 04307892- 90,00,000 Group Ltd. 78 ALES LLP 195001 SARITA CSB/0331- Brightcom DCB/225224123456 12-Apr-21 COMMOS 04307892- 90,00,000 Group Ltd. 78 ALES LLP 195001 Total Allottee to BGL 4,10,00,000

20. The diagrammatic representation of the table above, is shown below.

21. From the above observations, it is clear that there was no real receipt of share application money by BGL from Sarita for the shares allotted in the preferential issue. In fact, Sarita paid only Rs.3 lakh on net basis (Rs.4.10 Crore-Rs.4.07 Crore) from BGL, and received shares without actually paying the reminder of the consideration. 22. It was further observed that Mr. M. Suresh Kumar Reddy had transferred Rs.1.15 Crore to Sarita on March 29 & 31, 2022 from his Axis Bank Account No. 914010002169010, which was purportedly done towards becoming partner in Sarita. (iii) Kalpana Commosales LLP (Kalpana) 23. It was observed that Kalpana was allotted 2,50,00,000 Warrants, each having face value of Rs.2, at the rate of Rs.7.70 each, for a total consideration of Rs.19.25 Crore, which were subsequently converted into shares on July 28, 2021. The Company claimed that it had received the total consideration of Rs.19.25 Crore. In this regard, the Company submitted bank statements showing two credit transactions purported to be the receipts of Rs.8.81 Crore from Kalpana in two bank accounts. However, the bank account statements directly obtained from the banks did not reflect the said transactions. The details are as under: Table 9 Date Bank account Bank name Amount as per Amount as per the No. statement statement directly submitted by the obtained from bank Company (Rs.) 06-04-2021 22522412345678 DCB bank 4,81,25,000 No such transaction 15-07-2021 50200058179886 HDFC Bank 4,00,00,000 No such transaction

24. Further, the bank account statements obtained directly from the banks showed that the Company had received Rs.4.8125 Crore from Kalpana on April 08, 2021. It was thus observed that as against receipt of Rs.19.25 Crore to be paid by Kalpana for the shares allotted in the preferential issue, BGL received Rs.4.8125 Crore only, leaving a shortfall of Rs.14.44 Crore. Further, as per preliminary findings of investigation, similar to the case of Sarita, out of Rs.4.8125 Crore paid by Kalpana, Rs.4.81 Crore had originated from BGL itself, which reached Kalpana through circuitous transactions involving BGL’s subsidiary, viz. LIL Projects Pvt. Ltd. and another conduit entity, viz. Jatan Developers. Interestingly, all these transactions happened on the same date, i.e. April 08, 2021. The table below details the aforementioned circuitous fund transactions. Table 10 To bank/ Date From Entity From bank/ Bank Bank Amount account No To entity account No Brightcom Group DCB/2252241234 LIL Projects ICICI/760500 08-Apr-21 50,00,000 Ltd. 5678 Pvt. Ltd. 4446 Brightcom Group DCB/2252241234 LIL Projects ICICI/760500 08-Apr-21 1,08,25,000 Ltd. 5678 Pvt. Ltd. 4446 Brightcom Group DCB/2252241234 LIL Projects ICICI/760500 08-Apr-21 3,46,75,000 Ltd. 5678 Pvt. Ltd. 4446 Total BGL to Subsidiaries 5,05,00,000 Jatan CSB/0331- LIL Projects Pvt. 08-Apr-21 ICICI/7605004446 Developers Pvt 04261538- 50,00,000 Ltd. Ltd 195001 Jatan CSB/0331- LIL Projects Pvt. 08-Apr-21 ICICI/7605004446 Developers Pvt 04261538- 60,00,000 Ltd. Ltd 195001 Jatan CSB/0331- LIL Projects Pvt. 08-Apr-21 ICICI/7605004446 Developers Pvt 04261538- 40,00,000 Ltd. Ltd 195001 Jatan CSB/0331- LIL Projects Pvt. 08-Apr-21 ICICI/7605004446 Developers Pvt 04261538- 10,00,000 Ltd. Ltd 195001 Jatan CSB/0331- LIL Projects Pvt. 08-Apr-21 ICICI/7605004446 Developers Pvt 04261538- 90,00,000 Ltd. Ltd 195001 Jatan CSB/0331- LIL Projects Pvt. 08-Apr-21 ICICI/7605004446 Developers Pvt 04261538- 95,00,000 Ltd. Ltd 195001 Jatan CSB/0331- LIL Projects Pvt. 08-Apr-21 ICICI/7605004446 Developers Pvt 04261538- 90,00,000 Ltd. Ltd 195001 Jatan CSB/0331- LIL Projects Pvt. 08-Apr-21 ICICI/7605004446 Developers Pvt 04261538- 55,00,000 Ltd. Ltd 195001 Total Subsidiaries to Conduit entities 4,90,00,000 Kalpana CSB/331043 Jatan Developers CSB/0331- 08-Apr-21 Commosales 0704819500 1,51,00,000 Pvt Ltd 04261538-195001 LLP 1 Kalpana CSB/331043 Jatan Developers CSB/0331- 08-Apr-21 Commosales 0704819500 3,30,00,000 Pvt Ltd 04261538-195001 LLP 1 Conduit entities to 4,81,00,000 Total Allottee Kalpana CSB/3310430704 Brightcom DCB/225224 08-Apr-21 61,25,000 Commosales LLP 8195001 Group Ltd. 12345678 Kalpana CSB/3310430704 Brightcom DCB/225224 08-Apr-21 90,00,000 Commosales LLP 8195001 Group Ltd. 12345678 Kalpana CSB/3310430704 Brightcom DCB/225224 08-Apr-21 95,00,000 Commosales LLP 8195001 Group Ltd. 12345678

To bank/ Date From Entity From bank/ Bank Bank Amount account No To entity account No Kalpana CSB/3310430704 Brightcom DCB/225224 08-Apr-21 65,00,000 Commosales LLP 8195001 Group Ltd. 12345678 Kalpana CSB/3310430704 Brightcom DCB/225224 08-Apr-21 90,00,000 Commosales LLP 8195001 Group Ltd. 12345678 Kalpana CSB/3310430704 Brightcom DCB/225224 08-Apr-21 80,00,000 Commosales LLP 8195001 Group Ltd. 12345678 Total Allottees to BGL 4,81,25,000

25. The abovementioned circuitous funds movement is diagrammatically shown below.

26. From the above observations, it is apparent that Kalpana was allotted shares worth Rs.19.25 Crores (at the issue price) against an actual receipt of merely Rs.25000 by BGL. 27. It was further observed that Mr. M. Suresh Kumar Reddy, had transferred Rs.57 Lakh to Kalpana on March 31, 2022 from his Axis Bank Account No. 914010002169010, which was purportedly done towards becoming partner in Kalpana.

(iv) Shalini Sales LLP (Shalini) 28. It was observed that Shalini was allotted 2,00,00,000 Warrants, each having face value of Rs.2, at the rate of Rs.7.70 each, for a total consideration of Rs.15.40 Crore, which were subsequently converted into shares on July 28, 2021. The Company claimed that it had received the total consideration of Rs.15.40 Crore. In this regard, the Company submitted bank statements showing three credit transactions purported to be the receipts of Rs.11.85 Crore from Shalini. However, the bank account statements directly obtained from the banks did not reflect the said transactions. The details are as under: Table 11 Date Bank account No. Bank name Amount as per Amount as per the statement statement directly submitted by the obtained from bank company (Rs.) 03-04-2021 22522412345678 DCB Bank 3,85,00,000 No such transaction 12-07-2021 22522412345678 DCB Bank 4,00,00,000 No such transaction 19-07-2021 22522412345678 DCB Bank 4,00,00,000 No such transaction

29. Further, the bank statements obtained directly from the bank did not reflect any other payment from Shalini to BGL. It was therefore, observed that Shalini was allotted shares in preferential allotment without any actual consideration. 30. It was further observed that Mr. M. Suresh Kumar Reddy, had transferred Rs.95 Lakh to Shalini on March 31, 2022 from his Axis Bank Account No. 914010002169010, which was purportedly made towards becoming partner in Shalini. Summary of observations in respect of allotment to 4 LLPs 31. The observations in the preceding paragraphs show that BGL, in reality, received only partial or no consideration from the abovementioned four allottes, who were subsequently categorized as promoter entities, pursuant to Mr. M. Suresh Kumar Reddy becoming a partner in the said four allottee LLPs. The round tripping of funds by BGL through its subsidiaries and conduit entities, which was done to falsely portray the receipt of warrant / share application money from the allottees of the preferential issues, as detailed above, prima facie indicates diversion of Company’s assets for the benefit of allottees, in which Mr. Suresh Kumar Reddy, the promoter cum CMD of BGL, became a partner in the very next financial year.

32. Further, the mis-match in the credit entries reflected in the bank account statements submitted by the Company and those obtained directly from the banks indicate that the Company has submitted forged and fabricated bank account statements to SEBI with a deliberate intent of misleading the investigation. Violation of lock-in norms 33. As per Regulation 167 of (SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations, 2018), the shares allotted on preferential basis to the promoters or promoter group entities are subject to lock-in for a period of three years and shares allotted to persons other than the promoters and promoter group entities are subject to lock-in for a period of one year from the date of allotment. 34. Since the abovementioned four LLP allottees, who were allotted shares in August 2021 as non-promoter allottees, were subsequently categorized as promoter entities in March 2022, the shares allotted to them were required to be under lock-in for 3 years. However, it was observed that the lock-in on the shares held by the said 4 LLPs was vacated on September 30, 2022, i.e. before the expiry of three years.

35. It thus prima facie appeared that Mr. M Suresh Kumar Reddy devised a scheme to bypass the three-year lock-in prescribed under the ICDR Regulations, 2018 by first allotting shares of BGL to the abovementioned four LLPs identified as non-promoters and then subsequently reclassifying them as promoters by becoming partners in those LLPs. Through the above method, the shareholding of the promoter group increased from 4.12% as of December 31, 2021 to 18.47% as of March 31, 2022. 36. It was also noted that Mr. Subrato Saha, a Director of BGL between August 24, 2015 to October 25, 2017, was one of the designated partners of 3 LLPs, viz. Kalpana, Sarita and Shalini, at the time of preferential allotment. He continues to be so in Sarita and Kalpana as on date. The same also shows the close connection between the four LLPs and BGL.

Prima facie findings with respect to receipt of warrant / share application money from other allottees: 37. As already mentioned above, the preferential allotment of warrants / shares by BGL was done to 82 entities, out of which the analysis of receipts from four allottees, which became promoter entities after induction of Mr. M. Suresh Kumar Reddy as partner, has already been discussed above. Out of the remaining 78 entities, details of receipts from another 17 allottes have been examined and prima facie findings are as under: (i) Subrato Saha: 38. As stated earlier, Subrato Saha was earlier a director in BGL and he was also a partner in 3 LLPs that later became promoter entities. He had also directly subscribed in the preferential issue and was allotted 2,20,00,000 Warrants (subsequently converted into shares on July 30, 2021), each having face value of Rs.2, for a total consideration of Rs.16.94 Crore. 39. The Company had claimed to have received the entire amount of Rs.16.94 Crore from Mr. Subrato Saha in its bank account with DCB Bank and had submitted copies of bank account statements as documentary evidence. However, when this bank account statement was compared with the bank account statement directly obtained from DCB Bank, it was observed that credit entries shown in the bank account statement submitted by BGL either did not exist or there was a mis-match in the amount. The details are as under: Table 12 Date Bank account Bank name Amount as per Amount as per the No. (Company) bank statement statement directly submitted by the obtained from bank company (Rs.) (Rs.) 13-04-2021 22522412345678 DCB Bank 4,23,50,000 No such Transactions 17-06-2021 22522412345678 DCB Bank 6,00,00,000 No such Transactions 29-07-2021 22522412345678 DCB Bank 6,70,50,000 83,70,000 Total 16,94,00,000 83,70,000

40. From the above, it is apparent that BGL had received only Rs.83.70 Lakh from Mr. Subrato Saha, as against Rs.16.94 Crore. Investigation had prima facie revealed that even the said amount of Rs.83.70 Lakh had come from BGL itself. Further, the following transactions were observed in the bank account of Mr. Subrato Saha: Table 13 Date From Entity From bank/ Bank To entity To bank/ Amount account No Bank account No 28-Jul-21 Brightcom Group Equitas/209885713229 LIL Projects ICICI/7605004 5,00,00,000 Ltd Pvt. Ltd. 446 28-Jul-21 Brightcom Group Equitas/209885713229 LIL Projects ICICI/7605004 28,50,000 Ltd Pvt. Ltd. 446 Total BGL to Subsidiaries 5,28,50,000 28-Jul-21 LIL Projects Pvt. ICICI/7605004446 Subrato ICICI/0371010 91,13,000 Ltd. Saha 75820 28-Jul-21 LIL Projects Pvt. ICICI/7605004446 Subrato ICICI/0371010 90,00,000 Ltd. Saha 75820 28-Jul-21 LIL Projects Pvt. ICICI/7605004446 Subrato ICICI/0371010 1,00,00,000 Ltd. Saha 75820 28-Jul-21 LIL Projects Pvt. ICICI/7605004446 Subrato ICICI/0371010 80,00,000 Ltd. Saha 75820 28-Jul-21 LIL Projects Pvt. ICICI/7605004446 Subrato ICICI/0371010 70,00,000 Ltd. Saha 75820 28-Jul-21 LIL Projects Pvt. ICICI/7605004446 Subrato ICICI/0371010 60,00,000 Ltd. Saha 75820 29-Jul-21 Brightcom Group DCB/22522412345678 Subrato ICICI/4018906 83,70,000 Ltd Saha 45 Total BGL/Subsidiaries to allotee 5,74,83,000 28-Jul-21 Subrato Saha ICICI/037101075820 Brightcom Equitas/20988 4,05,00,000 Group Ltd 5713229 29-Jul-21 Subrato Saha ICICI/037101075820 Brightcom Equitas/20988 4,60,00,000 Group Ltd 5713229 Total Allottee to BGL 8,65,00,000

41. From the abovementioned transactions, it was observed that while Mr. Subrato Saha had paid a total sum of Rs.8.65 Crore to BGL, he had received a total of Rs.5.7483 Crore from BGL and LIL Projects Pvt. Ltd, which was a subsidiary of BGL. It was thus found that Mr. Subrato Saha had actually paid only Rs. 2.9017 Crore (i.e. Rs.8.65 Crore – Rs.5.7483 Crore) to BGL, as against Rs.16.94 Crore required to be paid as warrant / share application money. 42. The abovementioned transactions are diagrammatically shown below.

43. It was further observed that Mr. Subrato Saha had received a total sum of Rs.8.57 Crore from the bank account (No. 914010002169010, Axis Bank) of Mr. M Suresh Kumar Reddy, the MD of BGL, during FY 2021-22. The related entries appearing in the bank account statement of Mr. M Suresh Kumar are as under: Table 14 Amounts credited into the Axis Bank Probable source of funds (as per analysis Account of Subrato Saha. of bank account statements) TRAN_DATE CHQ NO Amount (Rs.) Money Date of Amount (RS.) received from receipt LIL 19/4/21 9,00,000 19/04/2021 - 10,00,000 LIL 22/4/21 9,00,000 22/04/2021 - 11,00,000 LIL 04/5/21 22,90,000 12/05/2021 - 9,00,000 LIL 19/5/21 15,00,000 19/05/2021 - 12,00,000 LIL 27/5/21 20,20,000 27/05/2021 - 20,00,000 BGL 25/6/21 50,00,000 25/06/2021 - 20,00,000 BGL 27/7/21 1,25,00,000 28/07/2021 - 20,00,000 BGL 29/7/21 2,80.00,000 29/07/2021 513886 2,80,00,000 BGL 29/7/21 3,10,00,000 BGL 30/7/21 23,10,000 30/07/2021 513889 3,15,67,000 BGL 30/7/21 22,50,000 LIL 20/8/21 75,00,000 25/08/2021 - 20,00,000 27/09/2021 - 20,00,000

Amounts credited into the Axis Bank Probable source of funds (as per analysis Account of Subrato Saha. of bank account statements) TRAN_DATE CHQ NO Amount (Rs.) Money Date of Amount (RS.) received from receipt Y Reach 28/10/21 20,00,000 28/10/2021 - 20,00,000 Y Reach 29/11/21 50,00,000 29/11/2021 - 20,00,000 Y Reach 24/12/21 30,00,000 26/12/2021 - 20,00,000 27/01/2022 - 20,00,000 25/02/2022 - 25,00,000 28/03/2022 - 15,00,000 8,57,67,000

44. As the source of funds for majority of the abovementioned transfers appeared to be either BGL or its subsidiaries, LIL Projects Pvt. Ltd. (LIL) and Yreach Media (Yreach), as seen from the above table, it is likely that even the abovementioned amount of Rs.2.9017 Crore, paid by Mr.Subrata Saha to BGL, belonged to/originated from BGL or its subsidiaries. (ii) Palace Heights Avenues LLP (PHAL) 45. PHAL was one of the allottees which was allotted 45,00,000 shares at Rs.7.70 per share during the financial year 2021-22. The total consideration payable by PHAL was Rs.3,46,50,000. An analysis of PHAL’s bank account statements showed that it had made payments to BGL during the period July 16 to 22, 2021 from its Bank account no. 3332000100060801 held with Karnataka Bank Limited. The details are as under: Table 15 Date From From Bank/ To To Bank To Account No. Amount Entity Account No. Entity (Rs.) 16/07/2021 PHAL Karnataka BGL Equitas Bank 209885713229 50,00,000 Bank/333200 17/07/2021 Equitas Bank 209885713229 50,00,000 0 100060801 19/07/2021 HDFC Bank 50200058179886 46,50,000 20/07/2021 DCB Bank 22522412345678 37,00,000 20/07/2021 HDFC Bank 50200058179886 40,00,000 20/07/2021 43,00,000 Federal Bank 16050200002993 22/07/2021 35,00,000 Equitas Bank 209885713229 22/07/2021 43,00,000 Equitas Bank 209885713229 22/07/2021 2,00,000 Equitas Bank 209885713229 Total 3,46,50,000

46. However, PHAL’s bank account statements showed that it did not have sufficient funds in its bank account for the abovementioned transfers to BGL and that it had received funds from two subsidiaries of BGL viz., LIL Projects Pvt. Ltd (LIL) and Yreach Media Pvt. Ltd., prior to fund transfers to BGL. The bank account statements of LIL and Yreach revealed that these entities had received the said funds from BGL. It was thus observed that BGL did not receive any consideration against shares allotted to PHAL and the funds received from PHAL actually belonged to BGL itself, which were routed to PHAL through circular transactions, as may be seen from the transactions summarized in the table below. Table 16 From bank/ Bank To bank/ Bank Date From Entity Amount account No To entity account No Brightcom Group DCB/2252241234 LIL Projects Pvt. ICICI/007605004 16-Jul-21 Ltd. 5678 Ltd 446 19,00,000 Brightcom Group DCB/2252241234 LIL Projects Pvt. ICICI/007605004 17-Jul-21 Ltd. 5678 Ltd 446 19,00,000 Brightcom Group DCB/2252241234 LIL Projects Pvt. ICICI/007605004 19-Jul-21 Ltd. 5678 Ltd 446 10,00,000 Brightcom Group HDFC/502000581 LIL Projects Pvt. ICICI/007605004 19-Jul-21 Ltd. 79886 Ltd 446 37,00,000 Brightcom Group HDFC/502000581 LIL Projects Pvt. ICICI/007605004 20-Jul-21 Ltd. 79886 Ltd 446 34,50,000 Brightcom Group DCB/2252241234 LIL Projects Pvt. ICICI/007605004 20-Jul-21 Ltd. 5678 Ltd 446 19,00,000 Brightcom Group DCB/2252241234 LIL Projects Pvt. ICICI/007605004 20-Jul-21 Ltd. 5678 Ltd 446 19,00,000 Brightcom Group Federal/16050200 LIL Projects Pvt. ICICI/007605004 20-Jul-21 Ltd. 002993 Ltd 446 33,00,000 Brightcom Group Equitas/20988571 LIL Projects Pvt. ICICI/007605004 22-Jul-21 Ltd. 3229 Ltd 446 43,00,000 Brightcom Group Equitas/20988571 LIL Projects Pvt. ICICI/007605004 22-Jul-21 Ltd. 3229 Ltd 446 2,00,000 Brightcom Group DCB/2252241234 Yreach Media ICICI/007605003 16-Jul-21 Ltd. 5678 Pvt. Ltd. 641 19,00,000 Brightcom Group DCB/2252241234 Yreach Media ICICI/007605003 16-Jul-21 Ltd. 5678 Pvt. Ltd. 641 12,00,000 Brightcom Group DCB/2252241234 Yreach Media ICICI/007605003 17-Jul-21 Ltd. 5678 Pvt. Ltd. 641 12,00,000 Brightcom Group DCB/2252241234 Yreach Media ICICI/007605003 17-Jul-21 Ltd. 5678 Pvt. Ltd. 641 19,00,000 Brightcom Group DCB/2252241234 Yreach Media ICICI/007605003 20-Jul-21 Ltd. 5678 Pvt. Ltd. 641 19,00,000 Brightcom Group DCB/2252241234 Yreach Media ICICI/007605003 20-Jul-21 Ltd. 5678 Pvt. Ltd. 641 12,00,000 Brightcom Group DCB/2252241234 Yreach Media ICICI/007605003 20-Jul-21 Ltd. 5678 Pvt. Ltd. 641 18,00,000 Total BGL to Subsidiaries 3,46,50,000 16-Jul-21 Yreach Media ICICI/0076050036 Palace Heights Karnataka/3332 20,00,000 Pvt. Ltd. 41 Avenues LLP 000100060801

From bank/ Bank To bank/ Bank Date From Entity Amount account No To entity account No 16-Jul-21 Yreach Media ICICI/0076050036 Palace Heights Karnataka/3332 11,00,000 Pvt. Ltd. 41 Avenues LLP 000100060801 16-Jul-21 LIL Projects Pvt. ICICI/0076050044 Palace Heights Karnataka/3332 19,00,000 Ltd 46 Avenues LLP 000100060801 17-Jul-21 Yreach Media ICICI/0076050036 Palace Heights Karnataka/3332 12,00,000 Pvt. Ltd. 41 Avenues LLP 000100060801 17-Jul-21 Yreach Media ICICI/0076050036 Palace Heights Karnataka/3332 19,00,000 Pvt. Ltd. 41 Avenues LLP 000100060801 17-Jul-21 LIL Projects Pvt. ICICI/0076050044 Palace Heights Karnataka/3332 19,00,000 Ltd 46 Avenues LLP 000100060801 19-Jul-21 LIL Projects Pvt. ICICI/0076050044 Palace Heights Karnataka/3332 46,50,000 Ltd 46 Avenues LLP 000100060801 20-Jul-21 LIL Projects Pvt. ICICI/0076050044 Palace Heights Karnataka/3332 37,00,000 Ltd 46 Avenues LLP 000100060801 20-Jul-21 LIL Projects Pvt. ICICI/0076050044 Palace Heights Karnataka/3332 38,00,000 Ltd 46 Avenues LLP 000100060801 20-Jul-21 Yreach Media ICICI/0076050036 Palace Heights Karnataka/3332 20,00,000 Pvt. Ltd. 41 Avenues LLP 000100060801 20-Jul-21 Yreach Media ICICI/0076050036 Palace Heights Karnataka/3332 20,00,000 Pvt. Ltd. 41 Avenues LLP 000100060801 20-Jul-21 Yreach Media ICICI/0076050036 Palace Heights Karnataka/3332 5,00,000 Pvt. Ltd. 41 Avenues LLP 000100060801 21-Jul-21 LIL Projects Pvt. ICICI/0076050044 Palace Heights Karnataka/3332 35,00,000 Ltd 46 Avenues LLP 000100060801 22-Jul-21 LIL Projects Pvt. ICICI/0076050044 Palace Heights Karnataka/3332 43,00,000 Ltd 46 Avenues LLP 000100060801 22-Jul-21 LIL Projects Pvt. ICICI/0076050044 Palace Heights Karnataka/3332 2,00,000 Ltd 46 Avenues LLP 000100060801 Total Subsidiaries to Allotee 3,46,50,000 16-Jul-21 Palace Heights Karnataka/333200 Brightcom Group Equitas/2098857 50,00,000 Avenues LLP 0100060801 Ltd. 13229 17-Jul-21 Palace Heights Karnataka/333200 Brightcom Group Equitas/2098857 50,00,000 Avenues LLP 0100060801 Ltd. 13229 19-Jul-21 HDFC 46,50,000 Palace Heights Karnataka/333200 Brightcom Group Bank/502000581 Avenues LLP 0100060801 Ltd. 79886 20-Jul-21 DCB 37,00,000 Palace Heights Karnataka/333200 Brightcom Group Bank/225224123 Avenues LLP 0100060801 Ltd. 45678 20-Jul-21 HDFC 40,00,000 Palace Heights Karnataka/333200 Brightcom Group Bank/502000581 Avenues LLP 0100060801 Ltd. 79886 20-Jul-21 Federal 43,00,000 Palace Heights Karnataka/333200 Brightcom Group Bank/160502000 Avenues LLP 0100060801 Ltd. 02993 22-Jul-21 Palace Heights Karnataka/333200 Brightcom Group Equitas/2098857 35,00,000 Avenues LLP 0100060801 Ltd. 13229 22-Jul-21 Palace Heights Karnataka/333200 Brightcom Group Equitas/2098857 43,00,000 Avenues LLP 0100060801 Ltd. 13229 22-Jul-21 Palace Heights Karnataka/333200 Brightcom Group Equitas/2098857 2,00,000 Avenues LLP 0100060801 Ltd. 13229 Total Allottee to BGL 3,46,50,000

47. A diagrammatic representation of the transactions is provided below:

48. From the above, it was observed that money was circulated in small amounts, on various dates, to fictitiously create an impression of payment of share application money by PHAL to BGL. 49. Apart from the above, it was further observed that hat PHAL was owned and controlled by P. MuraliMohana Rao, a partner of M/s. P. Murali & Co, the Statutory Auditor of BGL. Specific findings in this regard are mentioned later in this Order while discussing the role of auditor. (iii) Sahitay Commosales LLP (Sahitay) 50. Sahitay was allotted 2,50,00,000 warrants (subsequently converted into shares on July 28, 2021), with a face value of Rs.2 each, at Rs.7.70 per share during the financial year 2021-22, for a total consideration of Rs.19.25 Crore. The Company claimed that it had received the total consideration of Rs.19.25 Crore. In this regard, the Company submitted bank account statements showing four credit transactions purported to be the receipts of Rs.19.25 Crore from Sahitay. As in other cases, the bank account statements obtained directly from the banks did not show the said transactions. The details are as under:

Table 17 Total Date of credit Company Bank Bank name As per Bank As per Bank Amount of receipt in Account Number of the accounts accounts directly INR the bank of company submitted by obtained from Crores the company the company banks 12-04-2021 22522412345678 DCB Bank 4,81,25,000 No such transaction 19.25 26-05-2021 22522412345678 DCB Bank 1,43,75,000 No such transaction crores 15-06-2021 50200058179886 HDFC Bank 8,00,00,000 No such transaction 27-07-2021 50200058179886 HDFC Bank 5,00,00,000 No such transaction Total 19,25,00,000 NIL

51. It was observed from Sahitay’s bank account statements directly obtained from the banks that Sahitay had transferred Rs. 1.0125 Crores to BGL on April 09, 2021. No other payment from Sahitay to BGL was observed. An examination of the bank account statements revealed that the abovementioned amount of Rs. 1.0125 Crore paid by Sahitay to BGL had originated from BGL itself, which was rotated in a circular fashion through conduit entities where each leg of the transaction was completed on the same day, i.e. April 09, 2021. The details of the circular transactions are as under: Table 18 From bank/ Bank To bank/ Bank Date From Entity Amount account No To entity account No Yreach Media ICICI/76050036 09-Apr-21 Brightcom Group Ltd. DCB/7605003641 1,00,00,000 Pvt. Ltd. 41 Yreach Media ICICI/76050036 09-Apr-21 Brightcom Group Ltd. DCB/7605003641 95,00,000 Pvt. Ltd. 41 Total BGL to Subsidiaries 1,95,00,000 Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd

From bank/ Bank To bank/ Bank Date From Entity Amount account No To entity account No Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 15,00,000 Pvt Ltd Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd Jatan Yreach Media Pvt. ICICI/3310426153 CSB/33104261 09-Apr-21 Developers Ltd. 8195001 538195001 20,00,000 Pvt Ltd Subsidiaries to Total Conduit entities 1,95,00,000 Sahitay Jatan Developers Pvt CSB/3310430787 CSB/33104307 09-Apr-21 Commosales Ltd 6195001 876195001 1,01,25,000 LLP Conduit entities to Total Allottee 1,01,25,000 Sahitay Commosales CSB/2252241234 Brightcom DCB/22522412 09-Apr-21 LLP 5678 Group Ltd. 345678 51,25,000 Sahitay Commosales CSB/2252241234 Brightcom DCB/22522412 09-Apr-21 LLP 5678 Group Ltd. 345678 50,00,000 Total Allottee to BGL 1,01,25,000

52. A graphic representation of the abovementioned transactions is provided below:

(iv) Hansraj Commosales LLP (Hansraj) 53. Hansraj was allotted 2,40,00,000 warrant (subsequently converted into shares on July 28, 2021), with a face value of Rs.2 each, at Rs.7.70 per share during the financial year 2021-22, for a total consideration of Rs.18.48 Crore. The Company claimed that it had received the total consideration of Rs.18.48 Crore. In this regard, the Company submitted bank account statements showing four credit transactions purported to be the receipts of Rs.18.48 Crore from Hansraj. However, the bank account statements directly, obtained from the banks, did not show the said transactions. The details are as under: Table 19 Date Bank account Bank name Amount as per Amount as per the No. (Company) statement statement directly submitted by obtained from bank the company (Rs.) 09-04-2021 22522412345678 DCB Bank 4,62,00,000 No such transaction 05-05-2021 22522412345678 DCB Bank 86,00,000 No such transaction 22-07-2021 16050200002993 Federal Bank 3,00,00,000 No such transaction 26-07-2021 16050200002993 Federal Bank 10,00,00,000 No such transaction Total 18,48,00,000

54. Further, examination of Hansaj’s bank account statements with Catholic Syrian Bank showed the following transactions: Table 20 Date From entity From bank/ To entity To bank/ Amount Bank account Bank No account No Hansraj CSB/331043128 Brightcom DCB/225224 1,00,00,000 20-07-2021 Commosales L 65195000 Group Ltd. 12345678 Hansraj CSB/331043128 Brightcom Equitas/2098 50,00,000 22-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 25,00,000 22-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 50,00,000 22-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 50,00,000 23-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 25,00,000 23-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 25,00,000 26-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 75,00,000 26-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 50,00,000 27-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 50,00,000 27-07-2021 Commosales L 65195000 Group Ltd. 85713229 Hansraj CSB/331043128 Brightcom Equitas/2098 25,00,000 27-07-2021 Commosales L 65195000 Group Ltd. 85713229 5,25,00,000

55. No other instance of payment by Hansraj to BGL was observed. From the above, it was observed that Hansraj paid Rs.5.25 Crore only as share application money for the shares allotted, as against the total consideration of Rs.18.48 Crore, leaving a shortfall of Rs.13.23 Crore. (v) Ponna Bhuvaneswari (Bhuvaneswari) 56. It was observed that Bhuvaneswari was allotted 4,50,000 warrant (subsequently converted into shares on July 01, 2021), with a face value of Rs.2 each, at Rs.7.70 per share during the financial year 2021-22, for a total consideration of Rs.34.65 Lakh. The Company claimed that it had received the full consideration of Rs.34.65 Lakh. In this regard, the Company submitted bank account statements showing four credit transactions purported to be the receipts of Rs.34.65 Lakh from Bhuvaneswari. However, the bank account statement of BGL, directly obtained from DCB Bank, did not show the said transactions. The details are as under: Table 21 Date Bank account No. Bank name Amount as per Amount as per the (Company) bank statement statement directly submitted by the obtained from bank company (Rs.) 05-04-2021 22522412345678 DCB Bank 3,66,250 No Such Transaction 06-04-2021 22522412345678 DCB Bank 5,00,000 No Such Transaction 22-06-2021 22522412345678 DCB Bank 12,00,000 No Such Transaction 29-06-2021 22522412345678 DCB Bank 13,98,750 No Such Transaction 34,65,000 NIL

57. Further, examination of Bhuvaneswari’s bank account statement with ICICI Bank showed payments amounting to Rs.23,66,250 from Bhuvaneswari to BGL between 04/04/2021 to 22/06/2021. It was further observed that Ajay Babu Ponna (husband of Bhuvaneswari), who was an employee of BGL, received Rs.39,00,000 during the aforementioned period from LIL and Yreach, the subsidiaries of BGL. The details of transactions are placed below. Table 22 From bank/ Bank To bank/ Bank Date Transferor To entity Amount account No account No Brightcom Group DCB/2252241234 LIL Projects 05-Apr-21 ICICI/7605004446 5,00,000 Ltd. 5678 Pvt Ltd Brightcom Group DCB/2252241234 LIL Projects 06-Apr-21 ICICI/7605004446 1,00,000 Ltd. 5678 Pvt Ltd Brightcom Group DCB/2252241234 LIL Projects 06-Apr-21 ICICI/7605004446 9,00,000 Ltd. 5678 Pvt Ltd Brightcom Group DCB/2252241234 LIL Projects 09-Apr-21 ICICI/7605004446 95,00,000 Ltd. 5678 Pvt Ltd

From bank/ Bank To bank/ Bank Date Transferor To entity Amount account No account No Brightcom Group DCB/2252241234 LIL Projects 28-Jun-21 ICICI/7605004446 9,00,000 Ltd. 5678 Pvt Ltd Yreach Brightcom Group DCB/2252241234 28-Jun-21 Media Pvt ICICI/7605003641 5,00,000 Ltd. 5678 Ltd Yreach Brightcom Group DCB/2252241234 29-Jun-21 Media Pvt ICICI/7605003641 10,00,000 Ltd. 5678 Ltd Yreach Brightcom Group DCB/2252241234 30-Jun-21 Media Pvt ICICI/7605003641 11,00,000 Ltd. 5678 Ltd BGL to 1,45,00,000 Total Subsidiaries LIL Projects Pvt Ajay Babu 05-Apr-21 ICICI/7605004446 ICICI/7601544693 4,00,000 Ltd Ponna LIL Projects Pvt Ajay Babu 06-Apr-21 ICICI/7605004446 ICICI/7601544693 2,00,000 Ltd Ponna LIL Projects Pvt Ajay Babu 06-Apr-21 ICICI/7605004446 ICICI/7601544693 2,00,000 Ltd Ponna LIL Projects Pvt Ajay Babu 09-Apr-21 ICICI/7605004446 ICICI/7601544693 4,00,000 Ltd Ponna LIL Projects Pvt Ajay Babu 12-Apr-21 ICICI/7605004446 ICICI/7601544693 4,00,000 Ltd Ponna LIL Projects Pvt Ajay Babu 22-Jun-21 ICICI/7605004446 ICICI/7601544693 8,00,000 Ltd Ponna LIL Projects Pvt Ajay Babu 28-Jun-21 ICICI/7605004446 SBI/20149762777 2,00,000 Ltd Ponna LIL Projects Pvt Ajay Babu 28-Jun-21 ICICI/7605004446 SBI/20149762777 2,00,000 Ltd Ponna LIL Projects Pvt Ajay Babu 30-Jun-21 ICICI/7605004446 ICICI/7601544693 1,00,000 Ltd Ponna Yreach Media Pvt Ajay Babu 28-Jun-21 ICICI/7605003641 SBI/20149762777 3,00,000 Ltd Ponna Yreach Media Pvt Ajay Babu UBI/13561010002 29-Jun-21 ICICI/7605003641 5,00,000 Ltd Ponna 4405 Yreach Media Pvt Ajay Babu UBI/13561010002 30-Jun-21 ICICI/7605003641 2,00,000 Ltd Ponna 4405 Subsidiaries to 39,00,000 Total Conduit entities Ponna ICICI/0076015446 ICICI/7270015002 Ajay Babu Ponna Bhuvaneswa 5,000 93 10 05-04-2021 ri Ponna ICICI/0076015446 ICICI/7270015002 Ajay Babu Ponna Bhuvaneswa 45,000 93 10 05-04-2021 ri Ponna ICICI/0076015446 ICICI/7270015002 Ajay Babu Ponna Bhuvaneswa 3,80,000 93 10 05-04-2021 ri Ponna ICICI/0076015446 ICICI/7270015002 Ajay Babu Ponna Bhuvaneswa 2,00,000 93 10 06-04-2021 ri Ponna ICICI/0076015446 ICICI/7270015002 Ajay Babu Ponna Bhuvaneswa 2,00,000 93 10 06-04-2021 ri Ponna ICICI/0076015446 ICICI/7270015002 Ajay Babu Ponna Bhuvaneswa 4,00,000 93 10 12-04-2021 ri

From bank/ Bank To bank/ Bank Date Transferor To entity Amount account No account No Ponna ICICI/7270015002 Ajay Babu Ponna SBI/Not Available Bhuvaneswa 3,00,000 10 28-06-2021 ri Conduit entities 15,30,000 Total to Allottee Ponna ICICI/7270015002 Brightcom DCB/2252241234 04-Apr-21 66,250 Bhuvaneswari 10 Group Ltd. 5678 Ponna ICICI/7270015002 Brightcom DCB/2252241234 04-Apr-21 2,00,000 Bhuvaneswari 10 Group Ltd. 5678 Ponna ICICI/7270015002 Brightcom DCB/2252241234 04-Apr-21 1,00,000 Bhuvaneswari 10 Group Ltd. 5678 Ponna ICICI/7270015002 Brightcom DCB/2252241234 05-Apr-21 1,00,000 Bhuvaneswari 10 Group Ltd. 5678 Ponna ICICI/7270015002 Brightcom DCB/2252241234 06-Apr-21 2,00,000 Bhuvaneswari 10 Group Ltd. 5678 Ponna ICICI/7270015002 Brightcom DCB/2252241234 06-Apr-21 2,00,000 Bhuvaneswari 10 Group Ltd. 5678 Ponna ICICI/7270015002 Brightcom DCB/2252241234 12-Apr-21 4,00,000 Bhuvaneswari 10 Group Ltd. 5678 Ponna ICICI/7270015002 Brightcom DCB/2252241234 22-Jun-21 8,00,000 Bhuvaneswari 10 Group Ltd. 5678 Ponna ICICI/7270015002 Brightcom Federal/16050200 28-Jun-21 3,00,000 Bhuvaneswari 10 Group Ltd. 002993 Total Allottee to BGL 23,66,250

58. A diagrammatic representation of the above transactions is placed below.

59. As Bhuvaneswari Ponna, along with Ajay Babu Ponna, received Rs.39 Lakh from BGL through LIL and Yreach, while she paid only Rs.23.66 Lakh to BGL against allotment of shares, it appears that Bhuvaneswari, through her husband, had actually received an amount of Rs.15.33 Lakh from BGL, apart from getting shares for free.

(vi) MLS Sudheer (Sudheer) 60. MLS Sudheer was allotted 6,00,000 warrants, (subsequently converted into shares on July 23, 2021), with a face value of Rs.2 each, at Rs.7.70 per share during the financial year 2021-22, for a total consideration of Rs.46.20 Lakh. The Company claimed that it had received full consideration of Rs.46.20 Lakh. In this regard, the Company submitted bank account statements showing two credit transactions (one each in Equitas bank and DCB Bank) purported to be the receipts of Rs.46.20 Lakh from Sudheer. However, the bank account statement of BGL, directly obtained from Equitas Bank did not show the credit transaction of Rs.34.65 Lakh. The details are as under: Table 23 Date Bank account Bank name Amount as per bank Amount as per the No. (Company) statement submitted statement directly by the company (Rs.) obtained from bank 15-04-2021 22522412345678 DCB Bank 11,55,000 11,55,000 21-07-2021 209885713229 Equitas 34,65,000 No Such Transaction Total 46,20,000 11,55,000

61. It was further observed that on July 13, 2021, Sudheer had paid Rs.46.20 Lakh to BGL’s bank account with Equitas Small Finance Bank. However, the trail of bank transactions indicated that the said amount of Rs.46.20 Lakh as including the amount of Rs.11.55 Lakh received on April 15, 2021 (total amount of Rs.46.20 Lakh) belonged to / originated from BGL itself, which routed the funds to Sudheer through LIL (subsidiary of BGL), M Suresh Kumar Reddy (MD of BGL) and Palletti Anil Naga. The details are as under: Table 24 Date From entity From Bank To entity To Bank/ Amount (Rs.) /Account Account No. Brightcom DCB/225224 LIL Projects Pvt ICICI/760500 15-Apr-21 Group Ltd 12345678 Ltd 4446 11,55,000 Brightcom Equitas/2098 LIL Projects Pvt ICICI/760500 13-Jul-21 Group Ltd 85713229 Ltd 4446 1,02,40,000 Total BGL to Subsidiaries 1,13,95,000 Brightcom Equitas/2098 M Sureshkumar Axis/914010 13-Jul-21 Group Ltd 85713229 Reddy 002169010 9,60,000 Brightcom Equitas/2098 M Sureshkumar Axis/914010 13-Jul-21 Group Ltd 85713229 Reddy 002169010 12,00,000 LIL Projects ICICI/760500 M Sureshkumar Axis/914010 15-Apr-21 Pvt Ltd 4446 Reddy 002169010 11,55,000 LIL Projects ICICI/760500 M Sureshkumar Axis/914010 13-Jul-21 Pvt Ltd 4446 Reddy 002169010 2,00,000 Total BGL & Subsidiaries to Suresh Kumar Reddy 35,15,000

Date From entity From Bank To entity To Bank/ Amount (Rs.) /Account Account No. M Sureshkumar Axis/914010 PALLETIANILNA Axis/NotAvail 15-Apr-21 Reddy 002169010 GAK able 11,55,000 Total Suresh Kumar Reddy to Conduit 11,55,000 PALLETI ANIL Axis/NotAvail KKBK/64201 15-Apr-21 NAGA K able MLSSudheer 0022319 11,55,000 M Sureshkumar Axis/914010 KKBK/64201 13-Jul-21 Reddy 002169010 MLSSudheer 0022319 10,65,000 M Sureshkumar Axis/914010 KKBK/64201 13-Jul-21 Reddy 002169010 MLS Sudheer 0022319 12,00,000 M Sureshkumar Axis/914010 KKBK/64201 13-Jul-21 Reddy 002169010 MLS Sudheer 0022319 12,00,000 Total Suresh Kumar Reddy & Conduits to Allottee 46,20,000 KKBK/64201 Brightcom Group DCB/225224 15-Apr-21 MLS Sudheer 0022319 Ltd. 12345678 11,55,000 KKBK/64201 Brightcom Group Equitas/2098 13-Jul-21 MLS Sudheer 0022319 Ltd. 85713229 5,00,000 KKBK/64201 Brightcom Group Equitas/2098 13-Jul-21 MLS Sudheer 0022319 Ltd. 85713229 5,00,000 KKBK/64201 Brightcom Group Equitas/2098 13-Jul-21 MLS Sudheer 0022319 Ltd. 85713229 2,00,000 KKBK/64201 Brightcom Group Equitas/2098 13-Jul-21 MLS Sudheer 0022319 Ltd. 85713229 12,00,000 KKBK/64201 Brightcom Group Equitas/2098 13-Jul-21 MLS Sudheer 0022319 Ltd. 85713229 10,65,000 Total Allottee to BGL 46,20,000

62. The fund flow is depicted in the following diagram.

63. As there was clear round-tripping of funds that originated from BGL and related entities, it emerged that as in the previous cases, shares were allotted without actually receiving the declared consideration. (vii) Kishan Prakash (Kishan) and Ishan Prakash (Ishan) 64. Kishan and Ishan were allotted 48,00,000 and 28,00,000 warrants / shares respectively, on May 27, 2020. Their names are appearing at sl. nos. 11 and 12 in the list of allottees mentioned in Table 3 above. BGL was to receive Rs.4.80 Crore and Rs.2.80 Crore as warrant / share application money from Kishan and Ishan respectively. 65. It was observed that Kishan paid Rs.1.115 Crore and Ishan paid Rs. 2.2955 Crore to BGL. However, it was observed that part of the share application money received by BGL was returned to Kishan (Rs. 0.6301 Crore in his Bank Account No. 100064276550 with Indusind Bank Ltd.) and Ishan (Rs.1.1901 Crore in his Bank Account No 100074680035 with Indusind Bank Ltd.) through LIL, a subsidiary of BGL. The details are as under: Table 25 Date From entity From Bank To entity To Bank/ Amount (Rs.) /Account Account No. Brightcom DCB/22522412 LIL Projects ICICI/007605 22-May-20 Group Ltd 345678 Pvt Ltd 004446 22,00,000 Brightcom DCB/22522412 LIL Projects ICICI/007605 22-May-20 Group Ltd 345678 Pvt Ltd 004446 20,00,000 Brightcom DCB/22522412 LIL Projects ICICI/007605 22-May-20 Group Ltd 345678 Pvt Ltd 004446 20,00,000 Brightcom DCB/22522412 LIL Projects ICICI/007605 22-May-20 Group Ltd 345678 Pvt Ltd 004446 10,00,000 Brightcom DCB/22522412 LIL Projects ICICI/007605 26-May-20 Group Ltd 345678 Pvt Ltd 004446 20,00,000 Brightcom DCB/22522412 LIL Projects ICICI/007605 26-May-20 Group Ltd 345678 Pvt Ltd 004446 20,00,000 Brightcom DCB/22522412 LIL Projects ICICI/007605 26-May-20 Group Ltd 345678 Pvt Ltd 004446 40,00,000 Total BGL to Subsidiaries 1,52,00,000 LIL Projects ICICI/00760500 IndusInd/100 20-May-20 Pvt Ltd 4446 Ishan Prakash 074680035 42,00,000 LIL Projects ICICI/00760500 IndusInd/100 22-May-20 Pvt Ltd 4446 Ishan Prakash 074680035 10,00,000 LIL Projects ICICI/00760500 Kishan IndusInd/100 22-May-20 Pvt Ltd 4446 Prakash 064276550 10,00,000 LIL Projects ICICI/00760500 Kishan IndusInd/100 22-May-20 Pvt Ltd 4446 Prakash 064276550 11,00,000 LIL Projects ICICI/00760500 IndusInd/100 22-May-20 Pvt Ltd 4446 Ishan Prakash 074680035 11,00,000

Date From entity From Bank To entity To Bank/ Amount (Rs.) /Account Account No. LIL Projects ICICI/00760500 IndusInd/100 22-May-20 Pvt Ltd 4446 Ishan Prakash 074680035 4,00,000 LIL Projects ICICI/00760500 Kishan IndusInd/100 22-May-20 Pvt Ltd 4446 Prakash 064276550 4,00,000 LIL Projects ICICI/00760500 IndusInd/100 10,00,000 22-May-20 Pvt Ltd 4446 Ishan Prakash 074680035 LIL Projects ICICI/00760500 Kishan IndusInd/100 10,00,000 22-May-20 Pvt Ltd 4446 Prakash 064276550 LIL Projects ICICI/00760500 IndusInd/100 20,01,000 26-May-20 Pvt Ltd 4446 Ishan Prakash 074680035 LIL Projects ICICI/00760500 Kishan IndusInd/100 20,01,000 26-May-20 Pvt Ltd 4446 Prakash 064276550 LIL Projects ICICI/00760500 IndusInd/100 22,00,000 26-May-20 Pvt Ltd 4446 Ishan Prakash 074680035 LIL Projects ICICI/00760500 Kishan IndusInd/100 8,00,000 26-May-20 Pvt Ltd 4446 Prakash 064276550 Total Subsidiaries to Allottees 1,82,02,000 Ishan IndusInd/10007 Brightcom DCB/225224 41,00,000 21-May-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 22-May-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 22-May-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 5,00,000 22-May-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 22-May-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 20,00,000 26-May-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 22,00,000 26-May-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 3,00,000 29-Sep-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 7,70,000 30-Sep-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 17-Oct-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 5,50,000 20-Oct-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 4,00,000 21-Oct-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 5,00,000 22-Oct-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 5,00,000 23-Oct-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 02-Nov-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 05-Nov-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 06-Nov-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 1,35,000 07-Nov-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 10-Nov-20 Prakash 4680035 Group Ltd. 12345678

Date From entity From Bank To entity To Bank/ Amount (Rs.) /Account Account No. Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 11-Nov-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 10,00,000 13-Nov-20 Prakash 4680035 Group Ltd. 12345678 Ishan IndusInd/10007 Brightcom DCB/225224 17-Nov-20 Prakash 4680035 Group Ltd. 12345678 10,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 22-May-20 Prakash 4276550 Group Ltd. 12345678 10,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 22-May-20 Prakash 4276550 Group Ltd. 12345678 9,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 22-May-20 Prakash 4276550 Group Ltd. 12345678 5,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 22-May-20 Prakash 4276550 Group Ltd. 12345678 10,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 26-May-20 Prakash 4276550 Group Ltd. 12345678 20,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 26-May-20 Prakash 4276550 Group Ltd. 12345678 8,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 16-Oct-20 Prakash 4276550 Group Ltd. 12345678 5,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 19-Oct-20 Prakash 4276550 Group Ltd. 12345678 10,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 22-Oct-20 Prakash 4276550 Group Ltd. 12345678 5,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 12-Nov-20 Prakash 4276550 Group Ltd. 12345678 10,00,000 Kishan IndusInd/10006 Brightcom DCB/225224 14-Nov-20 Prakash 4276550 Group Ltd. 12345678 9,50,000 Kishan IndusInd/10006 Brightcom DCB/225224 18-Nov-20 Prakash 4276550 Group Ltd. 12345678 10,00,000 Total Allottees to BGL 3,41,05,000

66. A pictorial representation of the above transactions is as under:

67. From the above, it was observed that Kishan and Ishan paid Rs.1.59 Crore only as share application money for the shares allotted, as against the total consideration of Rs.7.60 Crore, leaving a shortfall of Rs.6 Crores. (viii) Allotment to 9 other allottees: 68. BGL had made allotment to nine other allottees, viz. Manju Shivkrishna Damani, Varun Shiv Krishna Damani, Prerna Varun Damani, Pooja Rajendra Prasad Poddar, Rajendra Prasad Poddar, Sushila Devi Poddar, Ankit Kumar Alya, Sanjib Hirendra Chakraborty and Shivkrishna Harakchand Damani. Who are appearing at sl. nos. 13 to 21 in Table 3 provided above. BGL was to receive a total consideration of Rs.10,39,50,000 as warrant / share application money from the said nine allottees. 69. It was observed that BGL had claimed to have received the total consideration money of Rs.10,39,50,000 from the abovementioned allottees. However, preliminary findings of investigation revealed that BGL itself had funded these allottees through its subsidiaries (LIL and Yreach) and another conduit entity, viz. Sonal Styles Pvt. Ltd. (Sonal). It was found that LIL and Yreach had first made payments to Sonal, which then transferred funds to four allottes, viz. Ankit Kumar Alya, Sanjib Hirendra Chakraborty, Pooj Rajendra Prasad Poddar and Varun Shivkrishna Damani. Subseuently, Varun Shivkrishna Damani transferred part of the received funds to remaining five allottes, viz. Manju Shivkrishna Damani, Prerna Varun Damani, Rajendra Prasad Poddar, Sushila Devi Poddar, and Shivkrishna Harakchand Damani. Later, all nine allottees transferred funds to BGL as subscription money for the warrants / shares allotted. Thus, the money was rotated in a circular fashion to falsely portray that subscription money had been received by BGL from the abovementioned nine allottees. The details of the transactions are provided below:

Table 26 Date of Amount transacti From To Bank / (Rs.) on From Entity Bank/Account To entity Account Yreach ICICI Brightcom Group DCB Bank Media Pvt. Bank/76050036 40,00,000 Ltd. /22522412345678 24-Jun-21 Ltd. 41 Yreach ICICI Brightcom Group DCB Bank Media Pvt. Bank/76050036 14,75,000 Ltd. /22522412345678 24-Jun-21 Ltd. 41 Yreach ICICI Brightcom Group DCB Bank Media Pvt. Bank/76050036 93,70,000 Ltd. /22522412345678 25-Jun-21 Ltd. 41 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 99,00,000 Ltd. 29 Pvt. Ltd. 22-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 44,50,000 Ltd. 29 Pvt. Ltd. 22-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 1,000 Ltd. 29 Pvt. Ltd. 22-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 18,74,000 Ltd. 29 Pvt. Ltd. 22-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 50,00,000 Ltd. 29 Pvt. Ltd. 22-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 1,00,00,000 Ltd. 29 Pvt. Ltd. 22-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 12,25,000 Ltd. 29 Pvt. Ltd. 22-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 1,15,00,000 Ltd. 29 Pvt. Ltd. 23-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 3,75,000 Ltd. 29 Pvt. Ltd. 23-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 1,35,00,000 Ltd. 29 Pvt. Ltd. 23-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 53,75,000 Ltd. 29 Pvt. Ltd. 23-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 1,68,50,000 Ltd. 29 Pvt. Ltd. 23-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 1,72,50,000 Ltd. 29 Pvt. Ltd. 24-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 30,00,000 Ltd. 29 Pvt. Ltd. 24-Jun-21 46 ICICI Brightcom Group Equitas/2098857132 LIL Projects Bank/76050044 1,43,75,000 Ltd. 29 Pvt. Ltd. 25-Jun-21 46

Date of Amount transacti From To Bank / (Rs.) on From Entity Bank/Account To entity Account 12,95,20,00 Total BGL to Subsidiaries 0 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 99,00,000 Ltd. Bank/7605004446 Pvt. Ltd. 22-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 7,50,000 Ltd. Bank/7605004446 Pvt. Ltd. 22-Jun-21 917 ICICI LIL Projects Pvt. From narration/From Sonal Styles Bank/34805005 12,25,000 Ltd. narration Pvt. Ltd. 23-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 62,75,000 Ltd. Bank/7605004446 Pvt. Ltd. 23-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 90,00,000 Ltd. Bank/7605004446 Pvt. Ltd. 23-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 45,00,000 Ltd. Bank/7605004446 Pvt. Ltd. 23-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 36,00,000 Ltd. Bank/7605004446 Pvt. Ltd. 23-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 22,50,000 Ltd. Bank/7605004446 Pvt. Ltd. 24-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 62,50,000 Ltd. Bank/7605004446 Pvt. Ltd. 24-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 43,75,000 Ltd. Bank/7605004446 Pvt. Ltd. 24-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 30,00,000 Ltd. Bank/7605004446 Pvt. Ltd. 24-Jun-21 917 ICICI LIL Projects Pvt. ICICI Sonal Styles Bank/34805005 37,50,000 Ltd. Bank/7605004446 Pvt. Ltd. 25-Jun-21 917 Yreach ICICI LIL Projects Pvt. ICICI Media Pvt. Bank/76050036 35,00,000 Ltd. Bank/7605004446 24-Jun-21 Ltd. 41 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 20,00,000 Ltd. Bank/7605003641 Pvt. Ltd. 24-Jun-21 917 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 20,00,000 Ltd. Bank/7605003641 Pvt. Ltd. 24-Jun-21 917 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 20,00,000 Ltd. Bank/7605003641 Pvt. Ltd. 24-Jun-21 917 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 20,00,000 Ltd. Bank/7605003641 Pvt. Ltd. 24-Jun-21 917 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 3,75,000 Ltd. Bank/7605003641 Pvt. Ltd. 24-Jun-21 917

Date of Amount transacti From To Bank / (Rs.) on From Entity Bank/Account To entity Account ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 20,00,000 Ltd. Bank/7605003641 Pvt. Ltd. 25-Jun-21 917 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 20,00,000 Ltd. Bank/7605003641 Pvt. Ltd. 25-Jun-21 917 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 20,00,000 Ltd. Bank/7605003641 Pvt. Ltd. 25-Jun-21 917 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 18,75,000 Ltd. Bank/7605003641 Pvt. Ltd. 25-Jun-21 917 ICICI Yreach Media Pvt. ICICI Sonal Styles Bank/34805005 15,00,000 Ltd. Bank/7605003641 Pvt. Ltd. 25-Jun-21 917 Total Subsidiaries to Conduits 7,61,25,000 Axis Sonal Styles Pvt. ICICI Varun Bank/91801007 50,00,000 Ltd. Bank/34805005917 Damani 22-Jun-21 3818468 Axis Sonal Styles Pvt. ICICI Varun Bank/91801007 56,50,000 Ltd. Bank/34805005917 Damani 22-Jun-21 3818468 Axis Sonal Styles Pvt. ICICI Varun Bank/91801007 12,25,000 Ltd. Bank/34805005917 Damani 23-Jun-21 3818468 Axis Sonal Styles Pvt. ICICI Varun Bank/91801007 62,75,000 Ltd. Bank/34805005917 Damani 23-Jun-21 3818468 Axis Sonal Styles Pvt. ICICI Varun Bank/91801007 75,00,000 Ltd. Bank/34805005917 Damani 23-Jun-21 3818468 Axis Sonal Styles Pvt. ICICI Varun Bank/91801007 60,00,000 Ltd. Bank/34805005917 Damani 23-Jun-21 3818468 Sonal Styles Pvt. ICICI Pooja From Narration 36,00,000 23-Jun-21 Ltd. Bank/34805005917 Poddar Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 15,00,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 7,50,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 30,00,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 10,00,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 27,00,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 13,00,000 Ltd. Bank/34805005917 24-Jun-21 0714706

Date of Amount transacti From To Bank / (Rs.) on From Entity Bank/Account To entity Account Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 3,75,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 50,00,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 12,50,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Axis Sonal Styles Pvt. ICICI Ankit Alya Bank/91501003 61,25,000 Ltd. Bank/34805005917 24-Jun-21 0714706 Sonal Styles Pvt. ICICI Sanjib SBI/From 12,50,000 25-Jun-21 Ltd. Bank/34805005917 Chakraborthy narration Sonal Styles Pvt. ICICI Sanjib SBI/From 50,00,000 25-Jun-21 Ltd. Bank/34805005917 Chakraborthy narration Sonal Styles Pvt. ICICI Sanjib SBI/From 43,75,000 25-Jun-21 Ltd. Bank/34805005917 Chakraborthy narration Sonal Styles Pvt. ICICI Sanjib SBI/From 37,50,000 25-Jun-21 Ltd. Bank/34805005917 Chakraborthy narration Total Between Conduits and allottees/conduits 7,26,25,000 Axis Prerna Axis/918010074 Varun Damani Bank/918010073818 57,50,000 Damani 578705 23-Jun-21 468 Axis Manju Axis/918010074 Varun Damani Bank/918010073818 Shivakrisha 57,50,000 174581 23-Jun-21 468 Damani Axis From Rajendra Varun Damani Bank/918010073818 narration/From 57,50,000 Poddar 23-Jun-21 468 narration Axis From Sushila Devi Varun Damani Bank/918010073818 narration/From 57,50,000 Poddar 23-Jun-21 468 narration Axis From Pooja Varun Damani Bank/918010073818 narration/From 21,50,000 Poddar 23-Jun-21 468 narration Axis Shiva Axis/918010074 Varun Damani Bank/918010073818 Krishna 57,50,000 044668 23-Jun-21 468 Damani Total Between conduit and allottees 3,09,00,000 Shiva Krishna Brightcom Equitas/209885 /From narration 57,50,000 23-Jun-21 Damani Group Ltd. 713229 Axis/918010074578 Brightcom Equitas/209885 Prerna Damani 57,50,000 23-Jun-21 705 Group Ltd. 713229 Manju Shivakrisha Axis/918010074174 Brightcom Equitas/209885 57,50,000 23-Jun-21 Damani 581 Group Ltd. 713229 From narration/From Brightcom Equitas/209885 Rajendra Poddar 57,50,000 24-Jun-21 narration Group Ltd. 713229 Sushila Devi From narration/From Brightcom Equitas/209885 57,50,000 24-Jun-21 Poddar narration Group Ltd. 713229 From narration/From Brightcom Equitas/209885 Pooja Poddar 57,50,000 24-Jun-21 narration Group Ltd. 713229 Sanjib Brightcom Equitas/209885 SBI/30005356914 1,43,75,000 25-Jun-21 Chakraborthy Group Ltd. 713229

Date of Amount transacti From To Bank / (Rs.) on From Entity Bank/Account To entity Account Axis Brightcom Ankit Alya Bank/915010030714 Federal/ 62,50,000 Group Ltd. 24-Jun-21 706 Axis Brightcom Federal/160502 Ankit Alya Bank/915010030714 43,75,000 Group Ltd. 00002993 24-Jun-21 706 Axis Brightcom Equitas/209885 Ankit Alya Bank/915010030714 30,00,000 Group Ltd. 713229 24-Jun-21 706 Axis Brightcom DCB/22522412 Ankit Alya Bank/915010030714 93,75,000 Group Ltd. 345678 25-Jun-21 706 Axis Brightcom Equitas/209885 Varun Damani Bank/918010073818 57,50,000 Group Ltd. 713229 23-Jun-21 468 Total Allottees to BGL 7,76,25,000

70. A diagrammatic representation of the transaction is shown below.

(ix) Shankar Sharma 71. Mr. Shankar Sharma was allotted 1,50,00,000 warrants (subsequently converted into shares on March 09, 2022), with a face value of Rs.2 each, at Rs.37.70 per share during the financial year 2021-22, for a total consideration of Rs.56.65 Crore. The Company claimed that it had received the total consideration of Rs.56.65 Crore, as per the following details: Table 27 Date of No. of Allotm Total Amount Cheque Bank Cheque Cheque Allotment Shares ent (INR) No. name Date Amount allotted Price (INR) 09.03.2022 15,000,000 37.77 56,65,50,000 000013 Abu 29/10/2021 75,396,500 000014 Dhabi 18/11/2021 66,481,050 000015 Comm 7/03/2022 325,857,752 000016 ercial 9/03/2022 98,819,838 Bank 56,65,55,140

72. However, even after repeated reminders, BGL failed to provide documentary evidence of receipts of warrant / share application money from Mr. Shankar Sharma in its bank accounts. 73. On examination of BGL’s bank accounts where the proceeds of preferential issue were collected, it was observed that following payments were made by Mr. Shankar Sharma from his bank account with IndusInd Bank to the BGL’s accounts with Equitas Finance Bank Ltd. and HDFC Bank Ltd.: Table 28 From From TRAN AMOUNT To Bank To Bank To Bank Name ACCOUN ACCOUNT DATE (Rs.) Account Account No. T NO. NAME name 20099997 SHANKAR 11-Jul-22 B rightcom 209885713229 Equitas Finance 1002 S SHARMA 2,00,00,000 Group Limited Bank Ltd 20099997 SHANKAR 22-Jul-22 B r i g htcom 209885713229 Equitas Finance 1002 S SHARMA 95,78,656 Group Limited Bank Ltd 20099997 SHANKAR 25-Jul-22 B r i g htcom 209885713229 Equitas Finance 1002 S SHARMA 95,70,256 Group Limited Bank Ltd 20099997 SHANKAR 26-Jul-22 B r i g htcom 209885713229 Equitas Finance 1002 S SHARMA 79,70,945 Group Limited Bank Ltd 20099997 SHANKAR 01-Aug- B r i g htcom 209885713229 Equitas Finance 1002 S SHARMA 22 47,57,533 Group Limited Bank Ltd 20099997 SHANKAR 09-Sep- B r i g htcom 209885713229 Equitas Finance 1002 S SHARMA 22 95,52,489 Group Limited Bank Ltd 20099997 SHANKAR 12-Sep- B r i g htcom 209885713229 Equitas Finance 1002 S SHARMA 22 15,57,467 Group Limited Bank Ltd

From From TRAN AMOUNT To Bank To Bank To Bank Name ACCOUN ACCOUNT DATE (Rs.) Account Account No. T NO. NAME name 20099997 SHANKAR 22-Sep- B rightcom 209885713229 Equitas Finance 1002 S SHARMA 22 3,19,17,346 Group Limited Bank Ltd 20099997 SHANKAR 04-Oct-22 B rightcom 209885713229 Equitas Finance 1002 S SHARMA 4,00,00,000 Group Limited Bank Ltd 20099997 SHANKAR 06-Oct-22 B rightcom 209885713229 Equitas Finance 1002 S SHARMA 2,00,00,000 Group Limited Bank Ltd 20099997 SHANKAR 10-Oct-22 B rightcom 209885713229 Equitas Finance 1002 S SHARMA 1,90,00,000 Group Limited Bank Ltd 20099997 SHANKAR 18-Nov- B rightcom 209885713229 Equitas Finance 1002 S SHARMA 22 2,80,00,000 Group Limited Bank Ltd 20099997 SHANKAR 22-Nov- B rightcom 209885713229 Equitas Finance 1002 S SHARMA 22 3,14,00,000 Group Limited Bank Ltd 20099997 SHANKAR 28-Nov- B rightcom 50200058179886 HDFC Bank Ltd 1002 S SHARMA 22 2,46,31,200 Group Limited Total 25,79,35,892

74. From the above, it was observed that BGL had received Rs.25.7936 Crore from Mr. Shankar Sharma. Subsequently, Mr. Shankar Sharma vide emails dated July 25 & 26, 2023 informed SEBI that he paid Rs.14.19 Crore towards warrant application money to BGL’s HDFC Bank Account. In this regard, he submitted copy of his bank account statement. However, in the said statements, all the particulars of the transaction, except the amount, were concealed by redaction. Due to the same, the above payment could not be verified and the same is still under examination. Therefore, it appears that BGL has only received Rs.39.98 Crore (including Rs.14.19 Crore which could not be verified) as against total consideration due of Rs.56.6555 Crores and has not received the entire share application money from Mr. Shankar Sharma and that BGL’s claims in this regard are false. 75. Further, while BGL claimed that total consideration of Rs.56.6555 Crore had been received from Mr. Shankar Sharma between 29/10/2021 to 09/03/2022, BGL’s bank statements showed that Rs.25.7936 Crore was transferred by Mr. Shankar Sharma to BGL between 11/07/2022 to 28/11/2022.

76. SEBI has also repeatedly tried to obtain information and supporting documents from Mr. Shankar Sharma regarding payments made by him to BGL in respect of the warrants / shares allotted. However, Mr. Shankar Sharma is yet to provide complete information and documents to SEBI. The details of communication with Mr. Shankar Sharma are provided in the Table below: Table 29 Sl. Date of Mode / Content of No. Communica type communication tion Reply received 1 10/07/2023 Email Seeking information with Replied vide email dated respect to the preferential 11/07/2023 that he needs 10-allotment and payments 12 working days to extract the made to BGL information and reply. 2 12/07/2023 Summons Summons For Personal Appearance Before the Investigating Authority, Replied vide email dated under Section 11C(3) and 14/07/2023 that he is not able (5) of the SEBI Act, 1992. to open the attachment. 3 14/07/2023 Email Summons dated Replied vide email dated 12/07/2023 forwarded 17/07/2023 seeking 3-4 again working days to reply. 4 17/07/2023 Email IA’s reply stating that sufficient time to reply had already been provided.

IA once again asked the entity to submit information without further delay. Not responded 5 25/07/2023 Email Reminder email to earlier replied giving details of partial summons and emails payment (25%) without supporting documents (Bank statements) 6 26/07/2023 Email Reminder email to earlier Replied giving details of partial summons and emails payment (25%) without supporting documents (Bank statements) 7 26/07/2023 Email 2nd Reminder email on Replied vide email dated 26/07/2023 to submit bank 26/07/2023 provided bank statement and other details account statements in respect of the above partial statement. However, redacted and darkened the other information including bank account details. 8 27/07/2023 Email Seeking bank account details and details of remaining payments Not responded 9 03/08/2023 Summons Summons For Personal Apperance Before the Investigating Authority [Under Section 11C(3) and (5) of the SEBI Act, 1992] Not responded 10 09/08/2023 Email Seeking bank account Replied vide email dated details and details of 15/08/2023 seeking 3-4 remaining payments working days to reply.

However, no further reply has been received till date.

77. From the above, it is clear that ample opportunities have been given to Mr. Shankar Sharma to provide the correct position of payments made to BGL. However, he has failed to provide the same. Interestingly, one of the reasons for non-submission of payment details, cited by Mr.Shankar Sharma in his email dated August 15, 2023 is that the “We have been constrained by the delay on part of the company to reconcile all the remittances.” Remaining allottees under examination: 78. Apart from the abovementioned 22 allottees, the payments for the preferential allotments by remaining 60 allottees is still under examination. The details of the said allottees are as under: Table 30 Total No. of Allotment Sl. Date of Amount PAN Name of Allottee Shares Price (In No. Allotment (Rs. in allotted Rs.) Crores) 1 May 27, 2020 AANCM4288N Muskaan Limited 2,38,00,000 10 23.8 Pankti Commosales 2 Jul 1, 2021 AAQFP2110C 1,00,00,000 7.70 7.70 LLP Gautam Gopikishan 3 Jul 1, 2021 AACPM4482C 25,00,000 7.7 1.93 Makharia Puneet Gopikishan 4 Jul 1, 2021 AACPM4481B 25,00,000 7.7 1.93 Makharia 5 Jul 1, 2021 APNPM0869D Rushida Rahul Mehta 15,00,000 7.7 1.16 6 Jul 1, 2021 ALEPA3113D Asif Ismail Athaniya 10,00,000 7.7 0.77 7 Jul 1, 2021 CIDPD4334D Siddharth Dubey 7,50,000 7.7 0.58 Mohamed Majid M 8 Jul 1, 2021 BVEPS5192R 5,00,000 7.7 0.39 Siddiqui 9 Jul 1, 2021 AILPL0734H Loriya Mohsin Rafik 5,00,000 7.7 0.39 Meghna Kaustubh 10 Jul 1, 2021 CHJPK9280L 5,00,000 7.7 0.39 Kulkarni Kaustubh Balchandra 11 Jul 1, 2021 AIYPK6816G 5,00,000 7.7 0.39 Kulkarni Mangal 12 Jul 23, 2021 AAGCP5321E 4,00,00,000 7.7 30.8 Compusolution Pvt Ltd Talisman Securities 13 Jul 23, 2021 AABCT2710M 50,00,000 7.7 3.85 Pvt Ltd 14 Jul 23, 2021 AAQPY3388P Y Suryanarayana Raju 35,00,000 7.7 2.7 Cherukuru Srinivasa 15 Jul 23, 2021 AILPR0693P 15,00,000 7.7 1.16 Rao 16 Jul 23, 2021 AAAPH8507R Ayaz Amir Manjee 10,00,000 7.7 0.77 Patlolla Prashanth 17 Jul 23, 2021 ALBPP9265A 5,00,000 7.7 0.39 Reddy 18 Jul 23, 2021 AASPZ0870D Kaneez Zainab 5,00,000 7.7 0.39 Zainab Hajeebhai 19 Jul 23, 2021 AAAPH8504N 5,00,000 7.7 0.39 Manjee 20 Jul 23, 2021 AAGPM3434N Shabana Ayaz Manjee 5,00,000 7.7 0.39

Total No. of Allotment Sl. Date of Amount PAN Name of Allottee Shares Price (In No. Allotment (Rs. in allotted Rs.) Crores) Ashish Chhotubhai 21 Jul 23, 2021 ABUPH3172K 5,00,000 7.7 0.39 Hamid 22 Jul 23, 2021 CICPP5887L P Soumya 1,40,000 7.7 0.11 23 Jul 23, 2021 AGMPA7950M Adapa Srinivas 1,00,000 7.7 0.08 Himakumar 24 Jul 23, 2021 BBVPK8905R 40,000 7.7 0.03 Kondiparthi 25 Jul 23, 2021 AIWPR5262K P Siva Rama Raju 50,000 7.7 0.04 26 Jul 28, 2021 AAAPH8506Q Hanif Amir Manjee 5,00,000 7.7 0.39 27 Jul 28, 2021 AAHPM4562E Saira Hanif Manjee 5,00,000 7.7 0.39 28 Jul 28, 2021 AROPM8312Q Zeeshan Hanif Manjee 5,00,000 7.7 0.39 29 Jul 30, 2021 AAGPM6484L Parul Parimal Mehta 1,00,00,000 7.7 7.7 Raghunath Naidu 30 Jul 30, 2021 AMDPK8715F 8,00,000 7.7 0.62 Kodidini 31 Jul 30, 2021 AAKPY0010A Sayeeda Yaseen 4,00,000 7.7 0.31 32 Aug 12, 2021 AJDPJ0615L Vinita Jain 38,25,000 7.7 2.95 Vaishnava Priya 33 Jan 23, 2022 AGEPV2789D 5,00,000 37.77 1.89 Veeramisti Aashika Global 34 Jan 23, 2022 AACCA7157R 2,00,000 37.77 0.76 Finance Pvt Ltd 35 Jan 23, 2022 AUXPD8039M Goonjan Dhar 1,00,000 37.77 0.38 36 Jan 23, 2022 AFFPB9520E Shikha Samit Bhartia 20,00,000 37.77 7.55 37 Jan 23, 2022 AKCPD4503F Shilpi Dixit 10,00,000 37.77 3.78 38 Jan 23, 2022 AKCPD5514G Vikas Dixit 10,00,000 37.77 3.78 39 Jan 23, 2022 AFNPT0866R Nikhil Tyagi 4,50,000 37.77 1.7 40 Jan 23, 2022 AAWPG3950D Arunangshu Ghosh 4,00,000 37.77 1.51 41 Jan 23, 2022 AOOPB1017N Dipankar Bonnerjee 4,00,000 37.77 1.51 42 Jan 23, 2022 AGKPA2421P Parul Moondhra 3,00,000 37.77 1.13 43 Jan 23, 2022 ADWPS6091G Maninder Singh Sahni 3,00,000 37.77 1.13 44 Jan 23, 2022 AHJPA2889B Sumita Acharya 2,50,000 37.77 0.94 45 Jan 23, 2022 ABJPC6626L Parul Sunil Chawda 1,60,000 37.77 0.6 46 Jan 23, 2022 AHTPC8742K Manoj Sunil Chawda 1,60,000 37.77 0.6 47 Jan 23, 2022 ANBPR4557R Aakanksha M Chawda 1,60,000 37.77 0.6 48 Jan 23, 2022 CCSPC9669R Hardik Sunil Chawda 1,60,000 37.77 0.6 49 Jan 23, 2022 AAIPR7932G Ritika Ranjan 1,50,000 37.77 0.57 50 Jan 23, 2022 AQXPS6227Q Sona Kumar Sampat 1,00,000 37.77 0.38 51 Jan 23, 2022 AAFPM1742A Raghav Mallik 1,00,000 37.77 0.38 52 Jan 23, 2022 BKCPK5919D Rajeev Kumar 1,00,000 37.77 0.38 53 Jan 23, 2022 AIXPB9876G Tarun Bhandari 60,000 37.77 0.23 Citrus Global Arbitrage 54 Jan 25, 2022 AAICC0411E 2,00,00,000 37.77 75.54 Fund Calypso Global 55 Jan 25, 2022 AAICC2725P 2,70,00,000 37.77 101.98 Investment Fund Navigator Emerging 56 Jan 25, 2022 AAGCN5591G 3,00,00,000 37.77 113.31 Market Fund Connecor Investment 57 Jan 25, 2022 AAHCC4401B 1,00,00,000 37.77 37.77 Enterprises Ltd

Total No. of Allotment Sl. Date of Amount PAN Name of Allottee Shares Price (In No. Allotment (Rs. in allotted Rs.) Crores) Lgof Global 58 Jan 25, 2022 AACCL7654E 3,00,00,000 37.77 113.31 Opportunities Ltd 59 Jan 25, 2022 ABYPB7421K Kamala Bai 1,00,00,000 37.77 37.77 Tirumala Stock 60 Jan 25, 2022 AAACL4665R 50,00,000 37.77 18.89 Broking Pvt. Ltd. Total 25,44,55,000 622.64

Utilization of proceeds of Preferential Issues: 79. BGL was asked to furnish the statement of utilization / application of funds raised through preferential issues, reviewed by its Audit Committee, as specified in Schedule II, Part C read with Regulation 18(3) of LODR Regulations, 2015. However, BGL responded by merely stating that its Audit Committee had approved the release of funds, as and when required, to both LIL and YReach. Further, BGL did not furnish copies of the Audit Committee approvals/resolutions. Instead, BGL furnished a copy of the resolution passed at the meeting of the Board of Directors of BGL on June 28, 2021. “RESOLVED THAT consent of the Board of Directors be and hereby accorded to pay advances as and when required to the Wholly Owned Subsidiaries M/s. LIL Projects Private Limited and M/s. YReach Media Private Limited for extending support in product development initiatives of Brightcom Group Limited. RESOLVED FURTHER THAT M/s. LIL Projects Private Limited and M/s. YReach Media Private Limited are authorized to outsource some part of product development activities to eligible contractors capable of executing the projects and make payments to such parties on behalf of Brightcom Group Limited.” 80. In response to SEBI’s query as to why BGL’s annual report for FY 2021-22 did not disclose the utilization of funds raised through preferential allotment, as required under Regulation 32(7A) of LODR Regulations, 2015, BGL merely stated that the funds received in the preferential allotment were fully utilized in that year and hence the same was not disclosed. However, as elaborated in above paragraphs, part of payments for share allotments was received by BGL in FY 2022-23 and not entirely in FY 2021-22 Loans given by BGL to its subsidiaries: 81. As per information provided by BGL to SEBI, out of the preferential issue proceeds of Rs.867.78 Crores, an amount of Rs.824 Crores was given as loans to two of its wholly owned subsidiaries, as mentioned below: Table 31 Particulars Amount (Rs. Crores) LIL Projects Private Ltd. 506 YReach Media Private Ltd. 318 Total 824

82. BGL had informed SEBI that payments were made to LIL in its ICICI Bank Account No. 007605004446 and to Yreach in its ICICI Bank Account No. 007605003641. From the examination of LIL’s bank account statements for FY 2021-22, provided by LIL, it was noted that LIL received about Rs.200 Crores directly from BGL and Rs.57 Crore from Yreach. Even if the payment from Yreach to LIL is considered as payment from BGL, the total amount received by LIL from BGL comes to Rs.257 Crores only, as against BGL’s claim of grant of loan of Rs.506 Crore to LIL. 83. Similarly, from the examination of Yreach’s bank account statements for FY 2021-22, provided by Yreach, it was observed that Yreach had received Rs.150.75 Crore from BGL. Out of the said amount, Rs. 57 Crore was transferred to LIL, as pointed out above. Taking into account the same, the actual amount ultimately received by Yreach from BGL came to Rs.93.75 Crore only, as against BGL’s claim of grant of loans of Rs.318 Crore to Yreach. 84. It was thus found that LIL and Yreach had together received only Rs.350.75 Crore from BGL as loans, out of the proceeds of the preferential issues, as against BGL’s claim of loans of Rs.824 Crore. Since BGL had recorded in its books of accounts, grant of loans of Rs.506 crores and Rs. 318 Crore to LIL and Yreach respectively, the books of BGL and its subsidiaries, viz. LIL and Yreach, appeared to be overstated.

BGL’s claims regarding utilization of loans by subsidiaries

85. BGL submitted the details of utilization of the abovementioned loans by its subsidiaries, LIL and Yreach. However, examination of the bank account statements of LIL and Yreach (as provided by BGL) vis-à-vis BGL’s claims of utilization of loans by subsidiaries revealed the following: Table 32 Amount in s. Crores As per reply submitted by As per Bank statements BGL Name Of The Entity Yreach LIL Total Yreach LIL Total Shortfall (Excess If Positive)

Ajanta Enterprises 6.21 - 6.21 0.15 0.2 0.35 -5.86 Blosoom Marketing Consultants P 12.55 - 12.55 8.99 4 12.99 0.44 Concept creations 11.67 - 11.67 0.15 0.15 -11.52 Dhristi Enterprises 8.65 - 8.65 1.5425 4.02 5.5625 -3.0875 GAK Exchange India Services Pvt. Ltd. 13.55 61.67 75.22 29.43 20.02 49.45 -25.77 Kamfost 10.7 - 10.7 0.2 0.2 -10.5 Keyton Enterprises 12 - 12 0 -12 Kreeva Enterprises 11.5 - 11.5 4 2 6 -5.5 NJ Enterprises 8.89 - 8.89 0.75 2.68 3.43 -5.46 Omega Solutions 6.13 - 6.13 0.45 0.45 -5.68 Orbit Metalics 5.6 - 5.6 0.27 0.27 -5.33 Oval Enterprise Pvt. Ltd. 3.97 - 3.97 3.25 2 5.25 1.28 Royal Impex 3.17 - 3.17 1.5 3 4.5 1.33 Shailendra Corporation 4.33 19.63 23.96 3.5 2 5.5 -18.46 Sonal Styles Pvt Ltd 1.74 - 1.74 1.775 5.4875 7.2625 5.5225 Shakti Enterprise - 31.1 31.1 1 1.03 2.03 -29.07 Aerona Overseas - 18.05 18.05 9 7 16 -2.05 Daman Infrastructure Pvt Ltd - 67.46 67.46 0.94 0.94 -66.52 Pahal Enterprises - 63.64 63.64 0.3125 1.3 1.6125 -62.0275 Starex International Inc - 58.28 58.28 5.419 5.25 10.669 -47.611 Grant View Properties Pvt Ltd - 23.68 23.68 0.0075 5.7625 5.77 -17.91 VC Metals Private Ltd - 15.05 15.05 3.38 4.12 7.5 -7.55 Dishu Corporation - 36.05 36.05 1 1 -35.05 Total 120.65 394.6 515.26 74.9265 71.96 146.8865 -368.3835

86. From the above, it was prima facie observed that BGL’s claims were false and that funds had been diverted from BGL and its subsidiaries.

Fund transfers to Shri M Suresh Kumar Reddy: 87. It was observed that funds amounting to Rs.25.12 Crore were transferred by BGL and its subsidiaries, LIL and Yreach, in FY 2021-22 to Mr. M Suresh Kumar Reddy (CMD and Promoter of BGL), out of the proceeds of preferential issues, though such payments to the promoter were never the objective of the said preferential issues. The details of the said transactions are as under: Table 33 Company Bank ACCT Counter Bank Accou Debit Ccredit Net Debit Name _NO party Name nt N o. Brightcom Equitas 20988 SURESHK 15,61,89,001 85,00,000 14,76,89,001 Group Ltd 57132 UMAR M 29 REDDY BRIGHTCO DCB 22522 Suresh AXIS 914010 31,00,087 - 31,00,087 M GROUP BANK 41234 Kumar BAN 002169 LIMITED 5678 MUTHUKU K 010 RU REDDY LTD BRIGHTCO DCB 22522 Suresh UTIB 914010 1,90,00,000 - 1,90,00,000 M GROUP BANK 41234 Kumar 002169 LIMITED 5678 MUTHUKU 010 RU REDDY BRIGHTCO HDFC 50200 Suresh 60,00,000 60,00,000 M GROUP Bank 05817 Kumar LIMITED 9886 MUTHUKU RU REDDY YREACH ICICI 00760 SURESH AXIS 914010 6,43,00,000 6,43,00,000 MEDIA Bank 50036 KUMAR BAN 002169 PRIVATE 41 MUTHUKU K 010 LIMITED RU REDDY LIL ICICI 00760 SURESH AXIS 914010 18,60,42,000 17,47,47,544 1,12,94,456 PROJECTS Bank 50044 KUMAR BAN 002169 PVT LTD 46 MUTHUKU K 010 RU REDDY LIL ICICI 00760 SURESH ICICI 112001 1,00,000 -1,00,000 PROJECTS Bank 50044 KUMAR BAN 001542 PVT LTD 46 MUTHUKU K RU REDDY Net Transfer to Shi Suresh Kumar Reddy from Proceeds of the preferential issue 25,12,83,544

88. The abovementioned transactions indicate that Rs.25.12 Crore was siphoned-off from the proceeds of preferential issues. Further, instances of Mr. M Suresh Kumar Reddy having used his account for ploughing back the share application money to some of the allottees of preferential allotments have already been brought out earlier in this Order.

Fund transfers to Shri Manohar Mollamma, Company Secretary 89. It was observed that funds collected on account of proceeds of preferential issues was also transferred to Shri Manohar Mollama, who was the company secretary and compliance officer of the Company during the period of preferential issues of BGL. The funds were first transferred from LIL’s account to the bank account (with SBI) of Ms. Bindusree Mollama, wife of Shri Manohar Mollama. The Details of such transfers are provided below: Table 34 Bank Customer Account IFSC Date_of_t Sender/R Receiver Receive _Na _Name _Numbe _Cod ransactio Debit_am eceiver Bank r Bank me r e n ount Name Account Name Number LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 07-04- MOLLAM 2026054 Bank LTD 004446 76 2021 5,00,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 09-04- MOLLAM 2026054 Bank LTD 004446 76 2021 8,00,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 12-04- MOLLAM 2026054 Bank LTD 004446 76 2021 2,00,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 30-06- MOLLAM 2026054 Bank LTD 004446 76 2021 8,50,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 30-06- MOLLAM 2026054 Bank LTD 004446 76 2021 50,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 01-07- MOLLAM 2026054 Bank LTD 004446 76 2021 8,50,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 01-07- MOLLAM 2026054 Bank LTD 004446 76 2021 4,00,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 02-07- MOLLAM 2026054 Bank LTD 004446 76 2021 5,00,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 03-07- MOLLAM 2026054 Bank LTD 004446 76 2021 4,25,000 A 7977 LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 05-07- MOLLAM 2026054 Bank LTD 004446 76 2021 4,75,000 A 7977

Bank Customer Account IFSC Date_of_t Sender/R Receiver Receive _Na _Name _Numbe _Cod ransactio Debit_am eceiver Bank r Bank me r e n ount Name Account Name Number LIL BINDU PROJECT ICIC0 SREE SBI ICICI S PVT 007605 0000 05-07- MOLLAM 2026054 Bank LTD 004446 76 2021 7,25,000 A 7977 57,75,000

90. After funds were transferred to Ms. Bindusree Mollama by LIL, part of said funds were immediately transferred to bank account of Shri Manohar Mollama. The details are under: Table 35 Date Particulars Transaction details Amount Balance transferred after transaction IT00ERJKA4 TO TRANSFER- TRANSFER TO 07-Apr-21 INB Personal-- 20067733667 5,00,000 41,060 IT00ESQKP0 TO TRANSFER- TRANSFER TO 09-Apr-21 INB Personal-- 20067733667 8,00,000 63,478 IT00EUKDC7 TO TRANSFER- TRANSFER TO 12-Apr-21 INB Personal-- 20067733667 2,00,000 60,795 IT00GAZBB1 TO TRANSFER- TRANSFER TO 30-Jun-21 INB personal-- 20067733667 8,50,000 5,134 TO TRANSFER- INB RTGS UTR NO: SBINR1202107013 0973971--M RTGS INB: IRQ4918911 01-Jul-21 Manohar / M Manohar 9,00,000 3,801 TO TRANSFER- INB RTGS UTR NO: SBINR1202107023 1131976--M RTGS INB: IRQ5081860 02-Jul-21 Manohar / M Manohar 9,30,000 41,171 TO TRANSFER- INB RTGS UTR NO: SBINR1202107053 1355162--M RTGS INB: IRQ5386829 05-Jul-21 Manohar / M Manohar 8,95,400 34,416 TO TRANSFER- INB RTGS UTR NO: SBINR1202107063 1532450--M RTGS INB: IRQ5507428 06-Jul-21 Manohar / M Manohar 7,25,000 41,837 58,00,400

91. From the above, it was found that a total of Rs.57.75 Lakh was received in the bank account of Ms. Bindusree Mollama and immediately thereafter, about Rs.58 Lakh was transferred to Shri Manohar Mollama. 92. Mr. Manohar Mollama was summoned to appear before the Investigating Authority (IA) of SEBI, to explain the aforementioned transactions, but he failed to do so. It thus appeared that funds transferred to Shri Manohar Mollama were siphoned off from the proceeds of preferential issues. Fund transfers to M Shreedhar Reddy 93. As per BGL’s email dated June 30, 2023, Shri M Shreedhar Reddy was a key person of BGL and was responsible for the preferential issues. It was observed that many fund transfers were made from the subsidiaries of BGL to Shri M Shreedhar Reddy, which appeared suspicious. Some of the identifies transactions are reproduced below. Table 36 Bank Accoun IFSC Date_o _Na Customer t_Numb _Cod f_trans Debit_amo Receiver me _Name er e action Narration unt Name LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 07-04- INF/INFT/02394999 REDDY Bank LTD 004446 076 2021 5741/ShreedharM 73,300 Malyala LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 07-04- INF/INFT/02395082 REDDY Bank LTD 004446 076 2021 0211/ShreedharM 80,000 Malyala LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 08-04- INF/INFT/02395457 REDDY Bank LTD 004446 076 2021 7551/ShreedharM 2,00,000 Malyala LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 09-04- INF/INFT/02396936 REDDY Bank LTD 004446 076 2021 4581/ShreedharM 2,00,000 Malyala LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 01-07- INF/INFT/02445278 REDDY Bank LTD 004446 076 2021 9101/ShreedharM 50,000 Malyala LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 09-07- INF/INFT/02450695 REDDY Bank LTD 004446 076 2021 6731/ShreedharM 3,50,000 Malyala LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 12-07- INF/INFT/02451515 REDDY Bank LTD 004446 076 2021 9341/ShreedharM 5,00,000 Malyala

LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 12-07- INF/INFT/02451637 REDDY Bank LTD 004446 076 2021 5231/ShreedharM 4,00,000 Malyala LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 12-07- INF/INFT/02452028 REDDY Bank LTD 004446 076 2021 0691/ShreedharM 1,62,500 Malyala LIL PROJEC ICIC ShreedhAR ICICI TS PVT 007605 0000 13-07- INF/INFT/02453288 REDDY Bank LTD 004446 076 2021 2181/ShreedharM 50,000 Malyala LIL PROJEC ICIC INF/INFT/02615026 ShreedhAR ICICI TS PVT 007605 0000 28-01- 6831//MalyalaShree REDDY Bank LTD 004446 076 2022 dhA/ 19,290 Malyala LIL PROJEC ICIC INF/INFT/02667371 ShreedhAR ICICI TS PVT 007605 0000 10-03- 0581//MalyalaShree REDDY Bank LTD 004446 076 2022 dhA/ 1,15,907 Malyala 22,00,997

94. Further, Shri M Shreedhar Reddy was also found to have received funds from YReach Media Pvt. Limited, the details of which are as under: Table 37 Bank Customer_Name Acco IFSC Date_of_ Transa Narration _Na unt_ _Cod transacti ction_ty Debit_amo me Num e on pe unt (Rs.) ber ICICI YREACH MEDIA 0076 ICIC0 01-07- T INF/INFT/02 Bank PRIVATE LIMITED 0500 00007 2021 445365847 4,00,000 3641 6 1/Sreed

95. It thus appeared that funds transferred to Shri M Shreedhar Reddy were siphoned off from the proceeds of the preferential issues. Summary of findings pertaining to preferential allotments: 96. From the observations and findings mentioned in the above paragraphs, it prima facie emerges that: (a) BGL itself had financed its abovementioned preferential issues by round-tripping / circuitous movement of funds to certain allottees through its subsidiaries, promoter cum CMD and other conduit entities. (b) BGL allotted warrants / shares to certain allottees against partial receipts or no receipt of warrant / share application money, even though it claimed to have received the full amount from the allottees. In case of certain allottees, BGL had refunded to the allottees the share application money received from them. (c) BGL had submitted forged and fabricated bank account statements as documentary evidence in order to falsely portray that the receipt of warrant / share application money from the allottees. (d) Section 67 of the Companies Act, 2013 imposes certain restrictions on the purchase of its own shares by the company or giving of loans by it for the purchase of its shares.

As per Clause 2 of the said Section, no public company shall give, whether directly or indirectly and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of, or in connection with, a purchase or subscription made or to be made, by any person of or for any shares in the company or in its holding company. The abovementioned funding by BGL to the allottees of the preferential issues was in violation of Section 67(2) of the Companies Act, 2013. (e) Since the receipt of the warrant / share application money from allottees was accounted in a fictitious manner, and the Company’s standalone and consolidated books reflected such fictitious receipts, the books of accounts of the Company were, prima facie, inflated. (f) In case of 4 allottees, which were later categorized as promoter entities, the lock-in on shares was vacated before the expiry of the prescribed lock-in period applicable to promoter entities. (g) The proceeds of preferential issues were not utilized as per the declared objects of the preferential issues. BGL claimed to have advanced loans to the tune of Rs.824 Crore to its subsidiaries, LIL and Yreach.

However, as per preliminary findings, BGL had transferred only Rs.350.75 Crore to LIL and Yreach. The remaining amount appeared to have been siphoned off from the Company / is unaccounted for. (h) Further, as BGL had recorded in its books of accounts, grant of loans of Rs.506 crores and Rs. 318 Crore to LIL and Yreach respectively, which were found to be false, the books of BGL and its subsidiaries, viz. LIL and Yreach, appeared to be overstated.

(i) As regards the utilization of loan amounts provided by BGL to LIL and Yreach, BGL’s claims in this regard were found to be false and misleading and it appeared that money had been siphoned off. (j) Further, BGL had also transferred funds to Mr. M Suresh Kumar Reddy (promoter-cum-CMD of BGL), Mr. Manohar Mollama (then Company Secretary) and Mr. M Shreedhar Reddy (key employee), out of the proceeds of the preferential issues, which appeared to be an act of siphoning off of funds of the Company. Further, instances of Mr. M Suresh Kumar Reddy having used his account for ploughing back the share application money to some of the allottees of preferential allotments were also found. Statutory Auditors, PCN & Associates and P. Murali & Co.

97. BGL had made preferential issues in the FYs 2020-21 & 2021-22. As observed earlier, BGL had transferred the preferential allotment proceeds to its two unlisted Indian Subsidiaries viz., LIL & Yreach. The details of the Statutory Auditors of BGL, LIL & Yreach for the FYs 2020-21 & 2021-22 are: Table 38 Details of Statutory Auditor Financial Year 2020-21 2021-22 Audit Firm Signing Partner Audit Firm Signing Partner Company Name Firm ICAI Membership Firm ICAI Membership Registration No. No. Registration No. No. P C N & Gopala Krishna P C N & Gopala Krishna Brightcom Associates Kandula Associates Kandula Group Limited 016016S 203605 016016S 203605 P C N & Gopala Krishna P C N & Gopala Krishna YReach Media Associates Kandula Associates Kandula Pvt.Ltd. 016016S 203605 016016S 203605 P C N & Gopala Krishna P C N & Gopala Krishna LIL Projects Pvt. Associates Kandula Associates Kandula Ltd. 016016S 203605 016016S 203605

98. As per requirements prescribed by the exchanges, a listed company that issued shares on preferential allotments has to submit a Certificate from its Statutory Auditors in the prescribed format inter-alia stating that they have verified the relevant records and documents of the company with respect to the preferential allotment and certify that the company has realized the Application/Allotment Money from the allottee(s) against the allotment of equity shares and there is no circulation of funds or mere passing of book entries while making the allotment. The certificate also has to state that consideration paid in cash, has been received from the respective allottees’ bank account and the relevant documents thereof are maintained by the company. 99. It was observed that BGL had submitted such certificates, issued by its statutory auditors, to BSE and NSE as part of its application for the listing of equity shares issued pursuant to preferential allotments. 100. As per Section 143(1)(b) & (f) of the Companies Act, 2013, the Statutory Auditor of a company is inter-alia required to inquire into the following matters:  whether transactions of the company which are represented merely by book entries are prejudicial to the interests of the company [143(1)(b)];  where it is stated in the books and documents of the company that any shares have been allotted for cash, whether cash has actually been received in respect of such allotment, and if no cash has actually been so received, whether the position as stated in the account books and the balance sheet is correct, regular and not misleading[143(1)(f)].

101. Section 143(12) of the Companies Act 2013 read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014 specifies that if an auditor of a company in the course of the performance of his duties as auditor, has reason to believe that an offence of fraud involving an amount or rupees one crore and above, is being or has been committed in the company by its officers or employees, the auditor shall report the matter to the Central Government. However, in case of a fraud involving lesser amount, the auditor shall report the matter to the audit committee. 102. Further, the Companies (Auditor’s Report) Order, 2016 (“CARO 2016”) (applicable up to FY 2020-21) issued by the Central Government under Section 143(11) required that the auditor’s report shall also include a statement on certain matters. Paragraphs 3(x) and 3(xiv) of the said Order provided for the following:

 Paragraph 3(x) - Whether any fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated;  Paragraph 3(xiv) - Whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of Section 42 of the Companies Act, 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not, provide the details in respect of the amount involved and nature of non-compliance;

103. Further, the Companies (Auditor’s Report) Order, 2020 (“CARO 2020”) (applicable w.e.f. FY 2021-22) issued by the Central Government under Section 143(11) requires that the auditor’s report shall also include a statement on certain matters. Paragraph 3(x)(b) of the said Order provides for the following:  Paragraph 3(x)(b) - Whether the company has made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year and if so, whether the requirements of section 42 and section 62 of the Companies Act, 2013 have been complied with and the funds raised have been used for the purposes for which the funds were raised, if not, provide details in respect of amount involved and nature of non-compliance;  Paragraph 3(x)(b) - whether any fraud by the company or any fraud on the company has been noticed or reported during the year, if yes, the nature and the amount involved is to be indicated;

104. Section 143(3)(j) of the Companies Act 2013 read with Rule 11(e) of Companies (Audit and Auditors) Rules, 2014 (Applicable w.e.f FY 2021-22) provides for reporting by auditors on lending or receiving funds through pass-through entities marked for the ultimate beneficiary. The text of this rule is reproduced below: (i) Whether the management has represented that, to the best of it’s knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; (ii) Whether the management has represented, that, to the best of it’s knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and (iii) Based on such audit procedures that the auditor has considered reasonable and appropriate in the circumstances, nothing has come to their notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

105. As explained above, the investigation revealed that BGL resorted to the structured circulation of funds where the preferential allotment proceeds were transferred to its subsidiaries, which in turn were transferred back to preferential allottees. Thus, such transactions were merely book entries as they did not result in net cash flow. In view of the same, the following lapses were found against PCN & Associates, the Statutory Auditor of the Company, which was also the auditor of two of its subsidiaries, viz. LIL and Yreach: (a) The Statutory Auditor, in its certificates on the basis of which the shares allotted pursuant to the preferential issue were listed on stock exchanges, had misrepresented that the Company had realized the Application/Allotment Money from the allottee(s) against the allotment of equity shares and there was no circulation of funds or mere passing of book entries in this regard. (b) The Statutory Auditor failed to report that the entries w.r.t receipt of preferential allotment proceeds were merely book entries, as they did not result in net cash flow. (c) The Statutory Auditor also failed to report that cash was not received against the allotment of shares and therefore the position of Equity

Share Capital and the securities premium represented in the Balance Sheet of BGL for the financial years 2020-21 & 2021-22 was incorrect, irregular and misleading. (d) The Statutory Auditor also failed to report the fraud involving the structured circulation of funds where the preferential allotment proceeds were transferred to the Company’s subsidiaries, which in turn were transferred back to preferential allottees, which did not result in cash flow to BGL. (e) The Statutory Auditor in its CARO reporting for the FYs 2020-21 & 2021- 22 misrepresented that the BGL had complied with provisions of the Companies Act, 2013 w.r.t preferential issues and also misrepresented that funds raised therefrom were used for the purposes for which the same were raised and also failed to provide the details with respect to the amount involved and nature of non-compliance. (f) The Statutory Auditor in its report for the FY 2021-22 of BGL had also failed to report that the funds were advanced or loaned by BGL to its two subsidiaries viz., LIL & Yreach with the intention to directly or indirectly fund the preferential allottees. (g) Further, the Statutory Auditor in its report for the FY 2021-22 of LIL & Yreach failed to report that the funds were received by LIL and Yreach from their holding company, BGL, with the intention to directly or indirectly fund the preferential allottees.

106. As per the provisions related to the rotation of statutory auditors under Rule 6(3) of the Companies (Audit and Auditors) Rules, 2014 read with Section 139 of Companies Act, 2013, the incoming auditor or audit firm shall not be eligible if such auditor or audit firm is associated with the outgoing auditor or audit firm under the same network of audit firms. 107. It was observed that immediately prior to the appointment of PCN & Associates as the Statutory Auditor of BGL in FY 2017-18, P. Murali & Co. was the Statutory Auditor of BGL since FY 1999-2000 to 2015-16. It was however found that PCN & Associates was associated with P Murali & Co in the following manner: (a) As per the statement of Chandra Babu M, Partner of PCN & Associates recorded before IA, he was associated with P Murali & Co as consultant between 2011-2015. (b) As per the website of PCN and Associates https://pcnassociates.com/resource/Partners.aspx, the following partners of PCN & Associates were associated with P. Murali & Co: a. CA Naveen Madivada, Partner, PCN and Associates did his CA articleship with M/s. P. Murali & Co. b. CA Lakshmi Prasanthi S, Partner, PCN and Associates did her CA articleship in M/s. P.Murali & Co.

108. It was observed that after the introduction of provisions for mandatory rotation of auditors in the Companies Act 2013, PCN & Associates, which had close association with P. Murali & Co., was appointed as Statutory Auditor of BGL for FYs 2017-18 to 2021-22 and subsequently P. Murali & Co., was again appointed as the Auditor of BGL for a term of five consecutive years commencing from the conclusion of the 23rd Annual General Meeting i.e. of FY 2021-22 held on September 30, 2022 up to the conclusion of the 28th Annual General Meeting.

109. It was also observed that after the introduction of provisions for mandatory rotation of auditors in the Companies Act 2013, PCN & Associates, which had close association with P. Murali & Co., was also appointed as Statutory Auditor of at least 18 companies during the FYs 2017-18 to FY 2021-22. Interestingly in 12 out of these 18 listed companies, P. Murali & Co., was appointed as Statutory Auditors in the FY 2022-23.

110. Further, As per Section 141(3)(e) of the Companies Act, 2013 dealing with the eligibility, qualifications and disqualifications of auditors, a person or a firm who, whether directly or indirectly, has business relationship (any transaction entered into for a commercial purpose) with the company, or its subsidiary, or its holding or associate company or subsidiary of such holding company or associate company shall not be eligible for appointment as an auditor of a company. 111. It was observed from the annual reports of the Company that M/s. Aarthi Consultants Private Limited was the registrar and share transfer agent (RTA) of BGL (i.e. there was business relationship), at least since 2000-2001. P Murali Mohana Rao, the partner of P Murali & Co., was found to be associated with M/s. Aarthi Consultants Private Limited in the following manner: (a) P Naga Nandini, wife of P Murali Mohana Rao, was one of the subscribers to memorandum & promoter of M/s. Aarthi Consultants Private Limited. (b) Ram Lakshmi Potukuchi and Vasantha Petasubba were the directors of M/s. Aarthi Consultants Private Limited from 27/03/1992 and 01/09/2018 respectively. Their email IDs registered with MCA are pmurali.cs@gmail.com which is same as email ID of Pluto Mines And Minerals LLP where P Murali Mohana Rao is a designated partner. (c) The registered address of M/s. Aarthi Consultants Private Limited is 1- 2-285, Domalguda Hyderabad – 500 029 which is same as address of Pluto Mines And Minerals LLP, Palace Heights Avenues LLLP, A M N Hotels LLP where P Murali Mohana Rao is a designated partner. (d) Vasantha Petasubba was one of the Directors of P Murali Consultants Private Limited which is a consultancy firm in which P Murali Mohana Rao is also a director. (e) The shareholders of M/s. Aarthi Consultants Private Limited were found to be related to P Murali Mohana Rao. 112. Interestingly, in 16 out of 18 listed companies in which PCN & Associates was appointed as statutory auditors replacing P. Murali & Co., the RTA is Aarthi Consultants Limited. The pattern of appointment of auditors and RTA, observed in 18 listed companies, since 2013-14 is given below:

Table 39

113. It was thus observed that the appointment of PCN & Associates in FY 2017-18 and the subsequent appointment of P. Murali & Co., was aimed at defeating the provisions mandating the rotation of the statutory auditors, as laid down in the Companies Act, 2013. 114. It was also observed that PCN & Associates and P. Murali & Co. had followed a similar modus operandi of appointment and reappointment by taking turns, in a number of listed companies, in order to circumvent the provisions of mandatory rotation of auditors in the Companies Act 2013. 115. Apart from the above, it was also observed that a payment of Rs.31.28 Lakh and Rs.58.71 Lakh was made by LIL to P Murali & Co. and Aarthi Consultants Pvt. Ltd. respectively. The details are as under: Table 40: Transferred by Dates Bank Name Transferred to Bank Amount Name/Acc. No. LIL Projects Pvt Ltd 07-07-2021 ICICI/007605 Aarthi Indian 004446 Consultants Pvt. Overseas 3,00,000 Ltd. Bank/043202 000002843 20-09-2021 Karnataka 2,00,000 Bank Ltd/ 09-12-2021 8,00,000 33320001000 28-01-2022 58701 3,00,000 02-02-2022 8,100 09-03-2022 8,06,738 22-07-2022 10,00,000

Transferred by Dates Bank Name Transferred to Bank Amount Name/Acc. No. 16-08-2022 24,300 08-09-2022 4,00,000 10-10-2022 24,300 20-10-2022 8,100 10-01-2023 20,00,000 LIL Projects Pvt Ltd 02-07-2021 ICICI/007605 P Murali And Co Bank Of 10,00,000 004446 Baroda/3217 09-11-2021 5,40,000 0200000357 04-01-2022 5,40,000 30-03-2022 2,16,000 06-08-2022 4,00,000

116. As per Section 141(3)(d) of the Companies Act, 2013 dealing with the eligibility, qualifications and disqualifications of auditors, a person who, or his relative or partner is holding any security of the company shall not be eligible for appointment as an auditor of a company. However, a relative of an auditor may hold securities in the company of face value not exceeding Rs. One Lakh. 117. It was observed that BGL had allotted 45,00,000 shares of face value Rs. 2 each at Rs.7.7 per share (including premium of Rs.5.7 per share) in preferential issue to M/s. Palace Heights Avenues LLP on July 23, 2021, for a total consideration of Rs. 3.465 Crore. As observed in earlier paras, the payment of the application money by Palace Heights Avenues LLP was fictitious, as the funds were merely rotated in a circuitous manner, resulting in allotment of shares without any actual payment to BGL.

118. From the Limited Liability Partnership Agreement Dated June 2020 it was seen that 10% and 90% of the Capital (i.e. total 100%) of Palace Heights Avenues LLP was contributed by P Murali Mohana Rao and his wife P Naganandini respectively. It was observed that the shareholders’ approval for the preferential allotment in which PHAL was the allottee was obtained in the AGM of BGL held on December 28, 2020. The explanatory statement to the notice of said AGM included the identity of the natural persons who were the ultimate beneficial owners of the shares proposed to be allotted and/or who ultimately controlled the proposed allottees, as required under Regulation 163 of ICDR Regulations, 2018.

However, in respect of PHAL, contrary to its LLP agreement, one Mr.B.Ravi Kumar was shown as the beneficial owner.

119. In view of the business relationship between Aarthi Consultants Limited and BGL (as BGL’s RTA) and P. Murali’s shareholding in M/s. Palace Heights Avenues LLP, P Murali & Co prima facie appeared to be ineligible to be appointed as Statutory Auditors of BGL. However, M/s.P Murali & Co, who were the statutory auditors of BGL till FY2016-17, were re-appointed as the Statutory Auditors of the Company for a term of five consecutive years commencing from the conclusion of the 23rd Annual General Meeting held on September 30, 2022 up to the conclusion of the 28th Annual General Meeting. 120. Regulation 36(5) of LODR Regulations, 2015 provides that: The notice being sent to shareholders for an annual general meeting, where the statutory auditor(s) is/are proposed to be appointed/re-appointed shall include the following disclosures as a part of the explanatory statement to the notice: (a) Proposed fees payable to the statutory auditor(s) along with terms of appointment and in case of a new auditor, any material change in the fee payable to such auditor from that paid to the outgoing auditor along with the rationale for such change. (b) Basis of recommendation for appointment including the details in relation to and credentials of the statutory auditor(s) proposed to be appointed.

121. As per the above regulation, BGL was required to disclose the proposed audit fee payable to the statutory auditor, basis of recommendations and credentials. BGL has neither disclosed the remuneration proposed to be paid to M/s. P. Murali & Co., Chartered Accountants, nor the credentials. Accordingly, BGL is non-compliant w.r.t. above stated Regulation. 122. The abovementioned observations lead to the inference that the Statutory Auditor failed to perform its duties and colluded with the management/promoters of the Company. 123. It is further concluded that PCN & Associates, which was the statutory auditor of BGL at the relevant time, gave false certificate that it had verified the relevant records and documents of the Company with respect to the preferential allotment and falsely certified that the Company had realized the Application/Allotment Money from the allottee(s) against the allotment of equity shares and there was no circulation of funds or mere passing of book entries in this regard. The certificate also falsely stated that the consideration paid in cash, was received from the respective allottees’ bank account and the relevant documents thereof were maintained by the Company. 124. Considering the above observations, it was evident that PCN & Associates was aiding and abetting BGL in covering up the act of share allotment by BGL without any actual receipt of share application money. Further, it was also evident that M/s. P Murali & Co, which became the statutory auditor of BGL after replacing PCN & Associates and has informed BGL about its resignation vide letter dated August 03, 2023, was also involved in facilitating the fraud and manipulation by BGL. One of the reasons cited by the statutory auditor while resigning was “Our decision has been prompted by the ongoing SEBI inquiries and other regulatory matters that have come to our attention.”

Role of Noticees: Shri M Suresh Kumar Reddy, Promoter and CMD 125. As Shri M Suresh Kumar was the CMD of the Company and various documents filed with the exchanges in relation to the preferential issues were under his signature, it is evident that he played a key role in the issuance of securities without adequate consideration in a fraudulent manner. Further, it was also prima facie found that Shri M Suresh Kumar Reddy was a direct beneficiary of the allotments without adequate consideration, since he was a partner in 4 LLP allottees which received 18% shares in the preferential allotments without any consideration. Further, he also received funds of the proceeds of the preferential issues. He also played an active role in the fraud by using his own accounts and other conduit entities to funnel back the share application money to the allottees, as already discussed above. Further, as CMD of the Company, Shri M Sureh Kumar Reddy was also responsible for non-submission / partial submission of information and documents and submission of forged and fabricated bank account statements to SEBI.

126. Further, as the financial statements of BGL appear to have mis-statements and mis-representations, Shri M Suresh Kumar, as CMD was also responsible for the same, since he was responsible for ensuring that the books of accounts and financial statements are true and fair. Shri Narayana Raju, CMA, Chief Financial Officer (CFO) 127. SEBI vide letter dated December 27, 2022 had inter alia sought the Bank Account Statements of BGL, LIL Projects Private Limited and Yreach Media Private Limited. In response, Shri Narayana Raju, the CFO, vide email dated January 04, 2023 forwarded letter dated January 03, 2023, signed by him, enclosing therewith the bank account statements, as Annexure E & C to the said letter. The following details of Bank Accounts were submitted along with the letter: Table 41 Name of the Account holder Bank name Bank Account No. Brightcom Group Limited DCB Bank 22522412345678 Equitas Small Finance Bank 209885713229 Federal Bank 16050200002993 HDFC Bank 50200058179886 LIL Projects Pvt Ltd ICICI Bank 007605004446 YReach Media Private Limited ICICI Bank 007605003641

128. As already stated above, on comparing the bank account statements submitted by BGL with those directly obtained from respective banks, it was observed that the transactions appearing in the bank statements submitted by BGL were either missing or were not matching with the transactions appearing in the statements submitted by the respective banks. 129. The bank account statements of the abovementioned six accounts submitted by BGL were forwarded to respective banks to confirm their authenticity. The following were the responses received from the banks: a. Equitas Small Finance Bank vide email dated April 01, 2023 informed that the bank statement was fabricated.

b. Federal Bank Vide email dated April 01, 2023 confirmed that the bank statements submitted by the Company was fabricated and manipulated. c. HDFC Bank vide email dated July 05, 2023 informed that the Bank Statement of BGL was manipulated. 130. The submission of the abovementioned forged Bank statements appeared to be an attempt to cover up the fact that the Company did not collect adequate consideration while making the preferential allotments as well as to camouflage the round-tripping of funds to the allottees through subsidiaries and conduit entities and the diversion of Company’s funds to Shri M Suresh Kumar Reddy and others. 131. Further, as the books of accounts of BGL appear to have mis-statements and mis-representations, Shri Narayana Raju, as CFO and Compliance Office was also responsible for the same, since he was responsible for ensuring that the books of accounts and financial statements are true and fair. Role of noticees 4 to 25 132. As already discussed above, Noticees 4 to 25 appeared to have received shares in preferential allotment without making any or partial payments as application money. Provisions of Laws prima facie violated: 133. Based on the abovementioned prima facie observations and findings, it is alleged that BGL, Mr. M. Suresh Kumar Reddy (BGL’s promoter-cum CMD), Mr. Narayan Raju (CFO), were involved in round-tripping of BGL’s own funds in a circular fashion to falsely portray receipt of consideration from allottees of preferential allotments and siphoning off of proceeds of preferential allotments, as already detailed above. Further, BGL, Mr. M. Suresh Kumar Reddy and Mr. Narayan Raju were responsible for submission of forged and fabricated bank account statements to SEBI with an intent to mislead the investigation and cover-up the irregularities. In view of the above, the Noticees are alleged to have violated the provision of Section 12A(a), (b) and (c) of the SEBI Act, 1992 and Regulations 3(a), (b), (c) (d), 4(1), 4(2)(c) & (f) of the PFUTP Regulations, 2003.

134. BGL, by financing its own preferential allotment by channeling its own funds to the allottees through layers of conduit entities including two of its wholly owned subsidiaries, is alleged to have violated Section 67 read with Section 24 of the Companies Act, 2013. Further, by failing to ensure that all equity shares allotted by way of preferential issues were fully paid up at the time of allotment, BGR has allegedly violated Regulation 160 of the ICDR Regulations, 2018. 135. Additionally, Mr. M Suresh Kumar Reddy, by circumventing the lock-in norms applicable to four LLP allottees subsequent to their categorization as promoter entities, is alleged to have violated Regulation 167 of ICDR Regulations, 2018. 136. Further, Noticee nos. 4 to 25, by participating in the allotment of shares without payment of adequate consideration, have benefitted themselves in a fraudulent manner, thereby violating the provisions of Section 12A(a), (b) and (c) of the SEBI Act, 1992 and Regulations 3(a), (b), (c) (d) and 4(1) of the PFUTP Regulations, 2003 Details of correspondence made by SEBI seeking information and documents 137. SEBI sent multiple letters / emails to Noticees 1 to 3 seeking information and documents in connection with the abovementioned preferential allotments. However, the said Noticees have failed to provide the required information and documents or have provided incomplete information. The details of the correspondence with them are as under: Table 42 Sr.No Date Mode Addressee Subject Delivered Remarks 1 02/12/2022 Letter BGL Information in Yes Submitted partial and incomplete connection with information in general and Preferential specially of the funds raised and Allotments made their utilisation and documentary during the evidence. Did not submit Bank financial Year account statement of subsidiary, 2021-22 LIL and Yreach. Utilisation of loans given to above subsidiaries and their financial statements. 2 27/12/2022 Letter BGL Information in Yes Submitted partial and incomplete connection with information in general and Preferential specially of the funds raised and Allotments made their utilisation and documentary during the evidence. Submitted bank

Sr.No Date Mode Addressee Subject Delivered Remarks financial Year account statements which was 2021-22 found to be forged. 3 27/04/2023 Summons BGL Summons For Yes Production of Documents the Did not provide any information. Investigation Submitted that one of the key authority under person involved during the IPO Section 11(2) and has been admitted into hospital 11C(2)(3) of the and therefore cannot provide the SEBI Act, 1992. information. 4 08/05/2023 Letter BGL Extension of Yes timeline for production of documents before the investigating authority Extension granted 5 08/06/2023 Email Mr. M Seeking holding Yes Suresh details of LLP Kumar Reedy Extension granted 6 14/06/2023 Email Mr. M Seeking holding Yes Suresh details of LLP Kumar Reedy Replied 7 27/06/2023 Summons Mr. M Summons For Yes Suresh Production of Kumar Documents the Reedy Investigation authority [Under Section 11(2) and 11C(3) and (5) of the SEBI Act, 1992] Did not reply 8 24/06/2023 Email Mr. M Email sent to Yes Suresh CMD & CFO Kumar advising to Reedy appear before IA on June 27, 2023 and to submit information and documents Did not provide any information. pending Submitted that one of the key submission in person involved during the IPO response to has been admitted into hospital earlier and therefore cannot provide the communications information. 9 24/06/2023 Email BGL Email sent to Yes CMD & Compliance Officer advising to appear before IA on June 27, CMD did not appear and 2023 and to Compliance officer Replied submit stating that he cannot travel due information and to his preoccupation with office documents works in the new company which pending he recently joined.

Sr.No Date Mode Addressee Subject Delivered Remarks submission in response to earlier communications 10 30/06/2023 Summons BGL Summons For Yes Production of Documents the Investigation authority, under Section 11(2) and Replied stating that he cannot 11C(2), (3) of the travel because of ill health of his SEBI Act, 1992. relatives

Need for interim order: 138. The prima facie observations and findings, as discussed in above paragraphs, clearly show the manipulations carried out by BGL and other Noticees, in respect of BGL’s preferential allotments, which inter alia involve fictitious receipts of share application money from allottees and siphoning of funds from BGL. However, BGL has brazenly attempted to cover-up its misdeeds by submitting forged and fabricated bank statements to SEBI. The blatant acts of the Company and other Noticees raise serious concerns about the affairs of the Company and also raise doubts as to whether the financial statements prepared by the Company and various disclosures made on Stock Exchange platform or in Annual Reports in the past are correct or not. 139. It is pertinent to mention that recently, an investigation by SEBI has found inter alia several instances of accounting irregularities and mis-statements in the financial statements of the Company. As per the findings of investigation, BGL attempted to camouflage accounting entries in excess of Rs.1280 Crore during FYs 2018-19 and 2019-20 to give a distorted picture of the Company’s financial position.

SEBI has already issued an Interim Order-cum-Show Cause Notice dated April 13, 2023 to BGL and other persons, including Mr. M. Suresh Kumar Reddy, who is a Noticee in this Order also. 140. Considering the new findings as brought out in this Order, it is imperative that the matter is probed thoroughly. Though the investigation has been able to examine receipts of consideration from only 22 allottees out of 82 allottees, there is a real possibility that the remaining allottees may have received shares in the preferential allotment against payment of no or partial consideration in a similar manner as the abovementioned 22 allottees. While a detailed investigation is going on in this matter to unravel the extent of fraud committed, the Company and its KMPs during the relevant time have not co-operated in the investigation. While the Investigating Authority had issued summonses to the Company and its directors for personal appearance and submission of information / documents, they have failed to appear before the Investigating Authority or submit information / documents on one pretext or the other.

Moreover, the Company and its CMD have resorted to submission of forged and fabricated bank account statements to mislead SEBI. 141. The fabricated bank account statements have been submitted as late as June 2023 and the Noticees 2 and 3 responsible for doing the same continue to be in charge of the Company even today. Thus, there is a real apprehension that the Noticees 2 and 3, if allowed to continue to be at the helm of affairs, may make every effort to derail SEBI’s investigation to unravel the truth in this matter by further forging and fabricating records and misleading SEBI. 142. Further, while payments by 60 allottees to BGL are still under examination, there is a prima facie case that Noticees 4 to 25 were allotted shares against partial or no consideration in the abovementioned preferential allotments. There is a real possibility that once this Interim Order is issued, Noticees 4 to 25 may sell the shares allotted to them and make an exit. Thus, they need to be restrained from doing so. In case of remaining 60 allottees, suitable action would follow after the examination in respect of them is completed.

143. In view of the above observations and considering the gravity of the prima facie findings, I am of the opinion that urgent intervention by SEBI, by way of issuance of interim directions, is warranted in this matter to safeguard the interests of investors and uphold the integrity of the financial system. Accordingly, I deem it to be a fit case to issue appropriate directions, pending a detailed investigation. 144. SEBI in the past has issued supplementary SCNs after the issue of an earlier Interim Order or SCN. It is perhaps for the first time that SEBI is resorting to issuing a second Interim Order for the same entity. This has been done with much thought and deliberation, considering the scale and gravity of manipulation. The modus operandi adopted suggested a pattern that was repeated multiple times in the preferential allotment. Further, while the auditors are prima facie found to be involved in the irregularities committed by BGL, action, as deemed fit, in respect of them would follow after conclusion of detailed investigation. Directions: 145. Keeping in view the prima facie observations and findings recorded in the preceding paragraphs and in order to protect the integrity of the securities market, I, in exercise of the powers conferred upon me under Sections 11(1), 11(4) and 11B(1) read with Section 19 of the SEBI Act, 1992 hereby issue the following interim directions, which shall be in force until further orders: - a) Noticees 2 and 3 shall cease to hold the position of a director or a Key Managerial Personnel in any listed company or its subsidiaries until further orders.

b) Noticee 1, i.e. BGL, shall place this Order before its Board of Directors, within 7 days from the date of receipt of the Order.

c) Noticee 2, i.e. Mr. M. Suresh Kumar Reddy, is hereby restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever until further orders. If the Noticee has any open position in any exchange traded derivative contracts, as on the date of the order, he can close out /square off such open positions within 3 months from the date of order or at the expiry of such contracts, whichever is earlier. The Noticee is permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this order.

d) Noticees 3 to 25 are hereby prohibited from disposing off shares of BGL held by them, directly or indirectly, in any manner whatsoever, until further order.

e) Noticee 1, i.e. BGL, is hereby directed to ensure that M/s. P. Murali & Co. and M/s. PCN & Associates, including their past and present partners, are not engaged with BGL or its subsidiaries in any capacity or manner whatsoever, until further order.

f) The preferential allottees, mentioned in Table No. 30 under para 78 above, are hereby directed to co-operate in the ongoing investigation by SEBI with respect of the preferential allotments.

146. The foregoing prima facie observations and findings contained in this Order are made on the basis of material available on record. The Noticees may, within 21 days from the date of receipt of this Order, file their reply/objections, if any, to this Order and may also indicate whether they desire to avail an opportunity of personal hearing on a date and time to be fixed in that regard. 147. This Order shall take effect immediately and shall remain in force until further orders. 148. A copy of this Order shall be served upon the Noticees, Stock Exchanges, Registrar and Transfer Agents and Depositories for necessary action and compliance with the above directions. A copy of this Order shall also be served on the entities mentioned in Table No. 30 under para 78 above.

DATE: AUGUST 22, 2023 ASHWANI BHATIA PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA