The Enforcement Directorate (ED) has carried out a search at the workplace of P. Murali Mohana Rao, who is an auditor at M/s Brightcom Group Limited, under the provision of the Foreign Exchange Management Act (FEMA), 1999. ED seized 3.30 crore unaccounted cash and 9.30 crore worth jewellery and bullion.
Additionally, the Enforcement Directorate has carried out searches in different locations, which encompass the residences of the CEO and CFO of the company. The inquiry was instigated following an investigation by the Securities and Exchange Board of India (SEBI) into the devaluation of assets valued at 868.30 crore by Brightcom Group via its overseas subsidiaries.
ED uncovered that Brightcom utilized subsidiaries and intermediary entities to circularly channel funds, self-financing the preferential offerings. Brightcom also deceitfully asserted to have received complete payment for preferential shares/warrants, substantiating this with ‘counterfeit and contrived bank statements’ submitted to SEBI.
It was further disclosed that over three hundred crore rupees, which had been provided as loans to subsidiaries, were partially misappropriated or lacked proper records. The company’s statutory auditors, namely M/s P Murali & Co. and M/s PCN & Associates (an affiliated entity of P Murali & Co.), not only neglected to report clear-cut fraud but also collaborated with the company’s management and promoters. Following the search operation, the Enforcement Directorate secured the premises belonging to Auditor Murali. The investigation is ongoing.
