ED Strikes Gold: ₹9.3 Cr Seized in Hyderabad Raid
ED Raids Hyderabad Firm for FEMA Violation, Seizes ₹9.3 Crore: Inside the Investigation
In a significant development, the Enforcement Directorate (ED) launched a series of searches in Hyderabad, targeting M/s Brightcom Group Ltd. The offices of the company and the residences of key personnel, including CEO M Suresh Reddy, CFO SLN Raju, and auditor P Murali Mohana Rao, were subjected to thorough scrutiny.
The initiation of these searches comes in the wake of an investigation led by the Securities and Exchange Board of India (SEBI). The focus of the investigation revolves around the impairment of assets worth a staggering ₹868.30 crore by Brightcom Group, primarily through its overseas subsidiaries.
Unveiling a Trail of Violations The ED’s meticulous inquiry exposed a trail of violations committed by Brightcom Group Limited, primarily under the purview of the Foreign Exchange Management Act (FEMA) of 1999. Among the startling revelations, it was found that the company resorted to financing preferential issues through a convoluted round-tripping of funds via subsidiaries and conduit entities.
Moreover, a deceitful narrative was spun as the company allegedly submitted ‘forged and fabricated bank statements’ to SEBI, falsely asserting that full payments were received for preferential shares and warrants.
Siphoning of Funds and Collusion As the layers of this intricate web were unraveled, more disturbing details emerged. Over ₹300 crore, advanced as loans to subsidiaries, was either siphoned off or remained unaccounted for. What’s more concerning is the alleged collusion between the company’s management, promoters, and the statutory auditors.
M/s P Murali & Co. and M/s PCN & Associates, a related entity of P Murali & Co., were the appointed auditors. However, these auditors not only failed to flag outright fraud but were suspected of actively participating in the wrongdoing.
During the extensive searches conducted by the ED, a collection of incriminating documents, digital devices, and unaccounted cash amounting to ₹3.30 crore were seized. Additionally, valuable assets including gold jewelry and bullion worth ₹9.30 crore were recovered from the residence of auditor Murali Mohana Rao (M/s P. Murali & Co.).
The residences of the company’s CEO M Suresh Reddy were also sealed as part of this ongoing investigation. The ED’s actions shed light on alleged financial improprieties and deceptive practices, potentially shaking the foundations of Brightcom Group’s operations and the broader financial landscape.