Tech Darling That Rose 2,500% Now Among India’s Worst Performers

(Bloomberg) -- Corporate governance issues have turned shares of Brightcom Group Ltd. into one of India’s worst performers this year after a 2,500% surge in 2021.

Most Read from Bloomberg

• Shopify Tells Employees to Just Say No to Meetings

• China’s Foreign Minister Says ‘Deeply Impressed’ With Americans

• Fed Affirms Inflation Resolve, Pushes Back Against Rate-Cut Bets

• Battered by Covid, China Hits Pause on Giant Chip Spending Aimed at Rivaling US

The ad-tech firm’s stock has declined more than 70% in 2022, making it the worst performer on S&P BSE 500 Index, data compiled by Bloomberg shows. The slump started after a market regulator raised concerns that some of the company’s disclosures and financial transactions have been “detrimental” to investors.

The beating in the company’s shares has wiped away 129 billion rupees ($1.6 billion) in market value, especially hurting retail investors, who own a majority of the firm. The Securities and Exchange Board of India last year appointed Deloitte Touche Tohmatsu India LLP, to conduct a forensic audit of Brightcom’s financials.

The “SEBI needs to move faster, and strengthen its investigation mechanism,” said Harish Kumar, a partner at Luthra and Luthra Law Offices India. “Inability to ensure compliance can result in erosion of shareholder wealth and faith in the market.”

No analysts track the company’s stock, despite the meteoric rise which pushed its valuation above $2.5 billion a year ago.

--With assistance from Ragini Saxena, Anto Antony and Preeti Singh.

Most Read from Bloomberg Businessweek

• There Has Never Been a Better Time for Billionaire Schadenfreude

• How McDonald’s Won Russia—and Then Lost It All

• New York Landlords Try Carbon-Sucking Towers to Comply With Climate Law

• Family Trips to Jamaica Were Early Economics Lessons for New Boston Fed President

• No-Honking Days and Noise Barriers Aim to Quell Mumbai’s Cacophony

©2022 Bloomberg L.P.