The Securities and Exchange Board of India (SEBI) on Monday took a big step and suspended trading in the shares of Bharat Global Developers. This action has been taken due to alleged irregularities in the company's financial disclosures and wrongly made preferential allotment. SEBI has banned 17 persons, including the MD, CEO, and other directors of the company, from trading in the securities market till further orders. Apart from this, the compliance officer of the company has been banned from working with any listed company.

It is worth noting that the stock of Bharat Global Developers registered a jump of 10,500% in the last year. In November 2023, this stock was Rs 16.14, which reached a high of Rs 1,703 in November 2024. However, due to the lower circuit on the stock recently, its price came down to Rs 1,236.45.

Fraud allegations and investigation announced

According to a report by Business Standard, SEBI has alleged that Bharat Global Developers has created "paper wealth" with a market cap of more than Rs 12,000 crore, which is not based on any real economic activity. The regulator says that the company made illegal profits of Rs 271.5 crore by manipulating prices and dumping shares. SEBI alleged that the company inflated share prices by making fake claims and showing non-existent orders. The company made false claims of partnership with reputed companies and technical expertise, which broke the confidence of investors.

No ban on bonuses and stock split

Bharat Global Developers had recently announced a big bonus and stock split, the record date of which was fixed as December 26. However, even after SEBI's order, it has not been stopped. SEBI whole-time member Ashwini Bhatia said, "This fraud has been done at the expense of the public. Investors relied on the veracity of the disclosures made by the company to the exchange, which proved to be wrong." SEBI has announced to start of a detailed investigation into the matter, which is likely to be completed within this financial year. This move of SEBI is considered an important step towards ensuring transparency in the market and the protection of investors' interests.

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