Shares of Brooge Energy have taken a hit in the stock market following a penalty imposed by federal regulators. The company allegedly inflated its revenues in documents related to a significant $500 million stock sale.
As of recent trading, Brooge Energy's stock has dropped by 21%, currently standing at $3.11. For the year, shares have experienced a substantial decline of 42%.
The U.S. Securities and Exchange Commission (SEC) revealed that the energy company, headquartered in the United Arab Emirates, provided auditors with false invoices. These invoices exaggerated the revenue generated from its oil facilities in Fujairah, which serves as the primary oil-storage hub in the UAE. The SEC claims that this inflation exceeded $70 million from 2018 to early 2021.
According to the agency, former Chief Executive Nicolaas Lammert Paardenkooper and former interim-CEO Lina Saheb either had knowledge of the fraudulent activities or displayed negligence in staying uninformed.
To resolve the allegations, Brooge has accepted a penalty of $5 million without admitting any wrongdoing. Additionally, Paardenkooper and Saheb will individually pay fines of $100,000.
During the SEC's investigation, Brooge agreed to forego the $500 million stock sale under scrutiny. Furthermore, in April, the company restated its financial statements for the years 2018 to 2020.
