A thread ๐งต on :
Brightcom Group : The Dark Side
Talks about corporate governance issues and business
Like Retweet for maximum reach
#bcg
#brightcom
#brightcomgroup
Brightcom Group : The Dark Side
Talks about corporate governance issues and business
Like Retweet for maximum reach
#bcg
#brightcom
#brightcomgroup
SEBI ordered Forensic Audit in Sept-21 which was not disclosed. This is the same time when company was completing preferential issue.
Even if they received reply from SEBI on 25th Feb, why it was not disclosed earlier and disclosed only after stock exch discl
Even if they received reply from SEBI on 25th Feb, why it was not disclosed earlier and disclosed only after stock exch discl
SEBI Forensic Audit covers
Impairment of Assets
Manipulation of Books of Accounts
Fund Diversion / Siphoning
Misrepresentation of information
While clarification focused only on Impairment of Assets
Also , SEBI letter not copied to NSE & BSE
Impairment of Assets
Manipulation of Books of Accounts
Fund Diversion / Siphoning
Misrepresentation of information
While clarification focused only on Impairment of Assets
Also , SEBI letter not copied to NSE & BSE
Says audited by EY but here is who audits consolidated financial statements a local CA firm.
Anyways ILFS & Satyam were also audited by Big 4..
Anyways ILFS & Satyam were also audited by Big 4..
Clarification from BCG on CNBC Interview
Equity Dilution : company raising money through preferential issue from non promoter non existing shareholders leading to dilution for existing shareholders and promoters.
Objective : WC & acquisition
Interesting promoters are not participating no skin in the the game
Objective : WC & acquisition
Interesting promoters are not participating no skin in the the game
Promoter seems to buying & selling very usually
Promoter also violated SEBI laws in past
Promoter also violated SEBI laws in past
Receivables amounts to 50% of FY21 Revenue
&
Receivables Days : 76 for Affle vs 143 for BCG vs 616 for Trade Desk
Huge bad debts : 4% of PBT in FY 20
&
Receivables Days : 76 for Affle vs 143 for BCG vs 616 for Trade Desk
Huge bad debts : 4% of PBT in FY 20
The so called financial audited by EY are not disclosed, even no group company financials have been disclosed.
Ideally companies with high corporate governance disclose their subsidiary financials
Ideally companies with high corporate governance disclose their subsidiary financials
How can somebody gave such exact estimate ( see their outlook vs actual performance )
Too much disclosure
Thanking SH, Shareholder milestones, Bonus rationale
( same happened in Rattanindia on Jubilant Food works deal & we know what they did in back fire )
Too much disclosure
Thanking SH, Shareholder milestones, Bonus rationale
( same happened in Rattanindia on Jubilant Food works deal & we know what they did in back fire )
Too less disclosure
Don't disclose target company on entering LOI
No subsidiary financials
Above disclosure are important when you derive most business from outside India
Don't disclose target company on entering LOI
No subsidiary financials
Above disclosure are important when you derive most business from outside India
Investment in affilates which forms 10% of total balance sheet size has no details.
These are not group companies since in consolidated financial FS are consolidated, subsidiaries are not shown as investments
Even not disclosed in related part
These are not group companies since in consolidated financial FS are consolidated, subsidiaries are not shown as investments
Even not disclosed in related part
The other side of #BCG Promoter increasing stake by acq some LLPs who were public SH raises question on integrity and whether other public SH might have influence of promoter and not disclosed.
They are definitely related hence inducted MD as partner and don't hold any oth Co.
They are definitely related hence inducted MD as partner and don't hold any oth Co.
Moreover these LLPs acquired shares via preferential issue in Nov-20 at mere price of โน7.70
#BCG promoters sold 19cr shares (16.2%) b/w Jan-22 to Mar-22 when promoter were hiding information of Sebi Forensic Audit
Old promoters stake reduced from 19.15% to 2.95% (almost 90% stake sold)
This stake sale was never disclosed.
#brightcom #brightcomgroup
Old promoters stake reduced from 19.15% to 2.95% (almost 90% stake sold)
This stake sale was never disclosed.
#brightcom #brightcomgroup
Stake sale by BCG Promoters get no attention because promoter acquired other public share holding entities.
Stake buy was disclosed Stake Sale Not....Nice
Insights credit @tsurendar @MorningContext @SanjaySharm052
Stake buy was disclosed Stake Sale Not....Nice
Insights credit @tsurendar @MorningContext @SanjaySharm052
There are other two case of corporate governance highlighted by @tsurendar themorningcontext.com
What we feel is.. Promoters now know the outcome of Sebi audit
So they have sold their 16% stake and very smartly become partner in public shareholder LLPs so as to hide actual stake sale
A smart move but not smarter then market
So they have sold their 16% stake and very smartly become partner in public shareholder LLPs so as to hide actual stake sale
A smart move but not smarter then market
#BCG didn't credit bonus shares even if 45 days (ideally it takes 15 days) have gone from record date. They have given reason of delay in approval from exchanges to list bonus shares.
Investors left with no option but to wait for bonus shares to be credited.
Investors left with no option but to wait for bonus shares to be credited.
This is not the first time #BCG promoters not disclosed about insider trading.
In 2013-14, they did similar thing and hide information by not disclosing
Below is excerpt from SEBI order in 2019
In 2013-14, they did similar thing and hide information by not disclosing
Below is excerpt from SEBI order in 2019
Name change history of #BCG:
1999: USA Greetings
2000: Ybrant Technologies
2001: Lanco Global System
2008: LGS Global Limited
2012: Ybrant Digital
2014: Lycos Internet Limited
2018: Brightcom Group
Continuous name change and business interest (Ex entered in AI / ML)
1999: USA Greetings
2000: Ybrant Technologies
2001: Lanco Global System
2008: LGS Global Limited
2012: Ybrant Digital
2014: Lycos Internet Limited
2018: Brightcom Group
Continuous name change and business interest (Ex entered in AI / ML)
BCG acquired Lycos (former competitor to Google) in 2010 but still didn't paid $16Mn out of $36Mn. This led to New York asking BCG to give back 56% stake to erstwhile Owners.
This matter is disputed and forms 10% of revenue and 10% of total assets
#brightcom
This matter is disputed and forms 10% of revenue and 10% of total assets
#brightcom
In last 10 yrs, 3 times BCG seen run-up. At all run-ups promoter sold stake.
What's more interesting is currently promoter stake is at all time low since the current run-up was the steepest.
#BCG #brightcomgroup we cannot just win against them in their own game
What's more interesting is currently promoter stake is at all time low since the current run-up was the steepest.
#BCG #brightcomgroup we cannot just win against them in their own game
Brightcom had 3 preferential issues in since 2016 - all were priced around โน10 per share. What's interesting is even at such low price promoters didn't participate
No slin in the game..Don't expect them to buy at current levels
#bcg #Brightcom #brightcomgroup
No slin in the game..Don't expect them to buy at current levels
#bcg #Brightcom #brightcomgroup
#BCG canceled earlier also preferential issue in Jul-21 bcoz allotment could not be done before 2021 bonus record date
Even now, bonus issue was delayed bcoz of preferential allotment needs to be completed before bonus record date otherwise they wont get bonus
Thanks @tsurendar
Even now, bonus issue was delayed bcoz of preferential allotment needs to be completed before bonus record date otherwise they wont get bonus
Thanks @tsurendar
Adding financial weakness highlighted by ET prime says trade receivables and loans & advances form major part of revenue & assets
#brightcom #bcg #brightcomgroup
#brightcom #bcg #brightcomgroup
Finally a comprehensive analysis of financial has been done by @soresearxh
BCG don't publish so called audited financials from where they derive 90% biz, their main auditors are not well known and also they dont audit them. They rely on what mgt gives
Whether their subsidiaries FS are actually audited?
dependency on subsidiaries standalone vs consoโฌ๏ธ
Whether their subsidiaries FS are actually audited?
dependency on subsidiaries standalone vs consoโฌ๏ธ
Ad Giants who rule industry are seeing slowing Digital Ad Revenues
Facebook & Snapchat all seeing QoQ fall in revenue
wsj.com
Facebook & Snapchat all seeing QoQ fall in revenue
wsj.com
Analyzing Brightcom Q4 : look beyond what management showing and whats hiding
Here is fancy Q4 release
#BCG #BRIGHTCOM
Here is fancy Q4 release
#BCG #BRIGHTCOM
Beyond what management showing
P&L Analysis
Standalone Rev are flat and PAT falls
EPS halved bcoz of equity dilution & bonus issues
Didn't understand logic of raising funds & paying dividend
Their outlook for FY23 matches with actuals at all parameter? How its possible #bcg
P&L Analysis
Standalone Rev are flat and PAT falls
EPS halved bcoz of equity dilution & bonus issues
Didn't understand logic of raising funds & paying dividend
Their outlook for FY23 matches with actuals at all parameter? How its possible #bcg
Balance Sheet Analysis
Unexplained investments, other financial assets, trade rec, loans given all gone up (diversion of funds)
Borrowing remain stable or increased
#brightcom #bcg
Unexplained investments, other financial assets, trade rec, loans given all gone up (diversion of funds)
Borrowing remain stable or increased
#brightcom #bcg
Cash flow analysis
Cash flow operations significantly got negative at Standalone while halved at Consolidated level
Cash balance in India only have what raised through recent pref issue ? They generally route this money to foreign entities just like they did earlier
End
#bcg
Cash flow operations significantly got negative at Standalone while halved at Consolidated level
Cash balance in India only have what raised through recent pref issue ? They generally route this money to foreign entities just like they did earlier
End
#bcg
Jacob Narzi, President at BCG is not associated with BCG since 2018 as per LinkedIn (pic 2)
Brad Cohen, Chief Strategy Officer is also associated with ither companies (pic 3)
Interestingly no remuneration is paid to BOD apart from sitting fees( pic 4)
Brad Cohen, Chief Strategy Officer is also associated with ither companies (pic 3)
Interestingly no remuneration is paid to BOD apart from sitting fees( pic 4)
Around 850cr funds raised in FY22 but cash today in Standalone entity is just 5cr on Mar-22
Where it gone?
382 cr as adv
216cr as capex, investments
(to outside india co whose financial are not published and this also raise concern why they need funds bcoz that biz is cash rich)
Where it gone?
382 cr as adv
216cr as capex, investments
(to outside india co whose financial are not published and this also raise concern why they need funds bcoz that biz is cash rich)
Analyzing recent Clarification on BCG Promoters Stake Sale
1. 19 Cr Shares were never pledged by promoters, no disclosure of pledge. (Pic 2)
2. Transfer of shares to lenders means invoked. Generally happens on default of loan. Hence lawyers concluded it as sale.
Cont..
1. 19 Cr Shares were never pledged by promoters, no disclosure of pledge. (Pic 2)
2. Transfer of shares to lenders means invoked. Generally happens on default of loan. Hence lawyers concluded it as sale.
Cont..
3. As per Mar-22 SHP, promoters don't have any additional voting rights apart from what shares they actually hold, so that claim of voting rights itself is false.(Pic2)
4. This filing is not disclosed on exchange.
5. There is no lender in Mar-22 SHP, holding 19cr shares or 18%
4. This filing is not disclosed on exchange.
5. There is no lender in Mar-22 SHP, holding 19cr shares or 18%
Independent Directors are joke at Brightcom
Peshwa Acharya
Sep-20 to Sept-21 : Indep Director
From Sept-21 : President,Strategy & Non Indep Director
Sebi New rule (wef 1-1-22) in pic 4
Though not non compliance but raises lot of questions on corp gov
Bogus Board / Management?
Peshwa Acharya
Sep-20 to Sept-21 : Indep Director
From Sept-21 : President,Strategy & Non Indep Director
Sebi New rule (wef 1-1-22) in pic 4
Though not non compliance but raises lot of questions on corp gov
Bogus Board / Management?
Brightcom finally removed dummy KMP Jacob Nirzi from their website after we highlighted this issues along with @MorningContext @tsurendar
Cfo will join from 25th July but company posted on website as a current cfo while ago (PS very small issue)
Cfo will join from 25th July but company posted on website as a current cfo while ago (PS very small issue)
Brightcom Group : Silent promoter selling continues in June-22
No. of Promoter Shares
Pre bonus Mar-22 : 233681791
Post bonus Mar-22 : 372802985
June-22 : 372782652
sold some 20,000 shares again, since no. of shares sold is very less not require discl & hence no change % hold
No. of Promoter Shares
Pre bonus Mar-22 : 233681791
Post bonus Mar-22 : 372802985
June-22 : 372782652
sold some 20,000 shares again, since no. of shares sold is very less not require discl & hence no change % hold
Brightcom 's bogus debt free claim, has debt of around 867 crores increased from 645 crore. This happened at a time when company recently raised funds & has cash ....
Unexplained as always
#brightcom
Unexplained as always
#brightcom
Here is how debt fared of the company in past few years used to have 50 or 100 cr of borrowing which has been paid off.
Interestingly even after so called huge FCF & fundraising, company other liabilities have increased significantly
Hence we mentioned "Bogus Debt Free Claim"
Interestingly even after so called huge FCF & fundraising, company other liabilities have increased significantly
Hence we mentioned "Bogus Debt Free Claim"
Brightcom after 10 months realized that MediaMint acquisition is not better for company. Simplly Senseless because this is the same company where they don't disclose M&A target bcoz they took months to do due diligence
Raises lot of question abt capital allocation & cash
Raises lot of question abt capital allocation & cash
This what Brightcom has said about changes in shareholding patterns during the year. Co says couldn't calculate changes due to multiple corporate actions. What a joke they have made of disclosures and Corporate Governance
#BRIGHTCOM #Bcg
#BRIGHTCOM #Bcg
Highlighted in Red are entities who got preferential shares at โน3.36 (after considering two bonus issues) & holding more than 1% as of June-22.
All 4 entities have started selling their stake partially or fully
Bought at 3.36 & sold at 36 - 10X return
Credits @SanjaySharm052
All 4 entities have started selling their stake partially or fully
Bought at 3.36 & sold at 36 - 10X return
Credits @SanjaySharm052
Brightcom Promoters demat account freezed by NSDL based on Exchange intimation dt 21.11.22 due to SEBI Circular wrt Non compliance (probably for CS which remained vacant for more than 6 months)
Interestingly company didn't disclose till now didn't disclose this
RIP CG
Interestingly company didn't disclose till now didn't disclose this
RIP CG
Credible sources citing confidentiality has confirmed that few big domestic clients which company has claimed as customers are fake & those big brands have never transacted with them
Also Standalone entity's 100% Revenue is also from export
At group level mere 9L of dom Rev
Also Standalone entity's 100% Revenue is also from export
At group level mere 9L of dom Rev
A thread by @Vishalgoel2601 confirms that Brightcom Group (flagship Indian entity) has filed Nil GST return which means company has zero revenue including exports or including any export services.
This is in contrast with company's claimed rev of 368 cr
This is in contrast with company's claimed rev of 368 cr
There is Board of Advisors mentioned on its company's website is suspicious and probably fake. These details are not available in companyโs AR, no details of meetings held and these names are same since last 10 yrs.
See Arjun Malhotra's LinkedIn profile has no details of BCG
See Arjun Malhotra's LinkedIn profile has no details of BCG
Narratives - Launch of Brightcom Group Investor Relations Contact Centre.
Fact - As per SEBI, not resolved investor complaints for more than 3 months consecutively for March-23 and Feb-23
Fact - As per SEBI, not resolved investor complaints for more than 3 months consecutively for March-23 and Feb-23
BCG clarified on SHP & Stake Sale - says shares have been sold by lenders during 2014-2020 as they were pledged
Here are few counter points -
1. Why there was no disclosure of invocation of pledge and selling by lenders required as per SAST & Insider Trading Regulations ?
2. They have given this reason to SEBI & NSE earlier also and they found it untenable (Pic 1,2)
1. Why there was no disclosure of invocation of pledge and selling by lenders required as per SAST & Insider Trading Regulations ?
2. They have given this reason to SEBI & NSE earlier also and they found it untenable (Pic 1,2)
3. It seems they have delayed disclosure by almost 6 yrs - eventually leading to inflated promoter shareholding.
4. Mismtach between data of RTA & Reported SHP is not explained
5. Interestingly these lenders were never appeared in SHP - quite unusual
Revised SHP awaited
4. Mismtach between data of RTA & Reported SHP is not explained
5. Interestingly these lenders were never appeared in SHP - quite unusual
Revised SHP awaited
Brightcom has revised shareholding pattern - promoter shareholding before LLP acquisition was below 4%
@nrmangal & @PuneetK009 , the masters of finding accounting redflags has done brilliant analysis on Brightcom
The key insight from their research is the accounting checks which one informed investor should consider
moneycontrol.com
The key insight from their research is the accounting checks which one informed investor should consider
moneycontrol.com
How its possible that Subsidiary Financials are signed / dated after Consolidated Financials even though there is no specific note?
BCG Consolidated FS - 30th May 22
BCG Subsidiary - OMS - 28th June 22
#redflag #corproategovernance
BCG Consolidated FS - 30th May 22
BCG Subsidiary - OMS - 28th June 22
#redflag #corproategovernance
Section 144 of Companies Act says Statutory Auditor of the company cannot be Internal Auditor of Holding Company
In case of BCG, this law is being violated as BCG's subsidiary OMS is being audited by EY while co in 2018 hires EY as Internal Audit
SEBI order : IA never happened
In case of BCG, this law is being violated as BCG's subsidiary OMS is being audited by EY while co in 2018 hires EY as Internal Audit
SEBI order : IA never happened
Loading suggestions...