SEBI finds ₹1,280 crore impairment losses in Brightcom Group audit

This is a final order by SEBI regarding two independent directors, Mr. Allam Raghunath and Mr. Subrato Saha, concerning their roles in the audit committee of Brightcom Group Ltd. during a period when the company allegedly overstated profits and failed to recognize asset impairments.

Mr. Allam Raghunath, Mr. Subrato Saha, Brightcom Group Ltd.

• SEBI found that Brightcom Group Ltd. violated accounting standards (AS 26, AS 38, Ind AS 36) between FY 2014-15 and FY 2019-20, resulting in misrepresentation of financial statements.
• Specific violations included wrongly capitalizing R&D costs and failing to recognize impairment losses of INR 411.76 crores (FY 2018-19) and INR 868.3 crores (FY 2019-20) in a timely manner.
• SEBI alleged that the noticees failed to ensure financial statements presented a true and fair view, thereby violating LODR Regulations and their duties as audit committee members.
• A specific allegation against Mr. Allam Raghunath is that he submitted false declarations regarding his independence as a director.
• The order records the noticees' defenses, including claims of limited involvement, reliance on management/auditors, and arguments regarding the calculation of director tenure terms.

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