HYDERABAD: Justice Surepalli Nanda of the Telangana High Court on Monday directed the Enforcement Directorate (ED) to file its response in a writ petition filed by Brightcom Group Limited challenging the legality of search and seizure operations carried out on August 23, 2023, as well as the summons issued on August 30, 2023.
In its petition, Brightcom claimed that the ED’s actions were arbitrary, illegal, and in violation of the provisions outlined in the Foreign Exchange Management Act of 1999 and the Foreign Exchange Management Adjudicating Proceedings and Appeal Rules of 2000.
In the last week of August, the ED conducted extensive searches at the premises of Brightcom as well as the residences of its CEO M Suresh Reddy, CFO SLN Raju and auditor P Murali Mohana Rao, all located in Hyderabad. During the searches, officials uncovered a trove of incriminating documents, digital devices and Rs 3.3 crore in unaccounted cash. Additionally, gold jewellery worth Rs 9.3 crore was seized from the auditor’s premises.
These searches were initiated under the provisions of the FEMA as confirmed by the probe agency’s press release. The investigative focus was rooted in ongoing inquiries conducted by the Securities and Exchange Board of India (SEBI), which centred on Brightcom’s alleged impairment of assets worth `868 crore through its overseas subsidiaries.
Following a hearing of the arguments by both sides, the court issued notices to the ED and adjourned the matter to October 17, 2023.