IndiaBulls Group is BILKING INDIA say Veritas ! ~ There’s more than Meets the Eyes on both sides !
Was prompted by an editor of a leading Media Financial Publication for my views on the controversial research reports generated by Veritas,Canada on Listed Indian Companies
Veritas is a Bear on IndiaBulls
Veritas,Canada released a Damning Research Report dated August 1,2012 on the IndiaBulls Group controversially titled BILKING INDIA ! ~ specifically covering three Companies IndiaBulls Real Estate at Rs 55.85,IndiaBulls Power at Rs 12.80 and IndiaBulls Financial Services at Rs 227.30
BILKING is a strong word ~ Obtain or withold Money by deceit or without justification,cheat or defraud ~ obtain money fradulently
This is My Immediate Take on The Veritas Research Report Controversy on the Indiabulls Group
On Veritas Motives
- Why do they come up with only Sell Reports ? ~ and that too just a hand full of companies have been covered in the past year ! ~ Are these Reports generated to create Big Bonanza through F & O Short Selling Quickies ~Yes,Veritas and Mr Neeraj Monga ! Why are there no Buy Reports !? ~ Nothing Worth Buying in India !? or you want Clients to make Monies only by Selling Off or Short Selling or Saving them from making the Investment! ?
- In my view this is unfair and unethical especially to other Clients already on the rolls ~ by agreeing to delay the IndiaBulls Report by one day just to tempt Altima,London to sign on for US $ 50000 a year for Research Reports generated by you so that they can act on the Report before it is issued for wider viewership ~ a question that follows is this ~ if these reports are a paid service then what does Mr Monga mean that he will delay the issue of the Report by one day !? what is he implying ? will he be issuing or leaking the report free ! to a wide audience who are not paying clients? ~ wonder if this borders on insider Trading !
On IndiaBulls Strong Reaction
- In initiating Criminal action,IndiaBulls is sending out a Strong Threatening & Menacing Message ~ “Don’t Mess with Us!” ~ perhaps only IndiaBulls can do the Messing around !
Neeraj Monga and Nitin Mangal,the Veritas analysts who have damned the IndiaBulls Group are seen as fearless crusaders by many as also foolish by some and with vested interests by quite a few~ their Motives are under the microscope in writing such a Damning Report ~ Veritas charges Signing up Clients an Annual Fee of US $ 50000 to receive such Reports ~ So Far these guys have damned the Reliance Group especially Reliance Industries and Reliance Communications,DLF and KingFisher ~ Their latest target has been the IndiaBulls Group
If you follow my blog you will not have to pay a single Dollar ! ~I’ve exposed quite a few Companies,including KingFisher Airlines ~ use the Search Engine to locate such posts
Check the tagline of my blog ” In India,Companies may fall sick but promoters rarely do!”
What these Veritas Analysts are doing is nothing new ~They are Analysing and Interpreting Financial Statements and Disclosures questioning Controversial & Vulnerable Big Companies Motives and Gameplan in their Operations,especially in Corporate Restructuring Exercises that involve Valuations and Raising of Finance and the myraid structure of related entities involved that benefits from Inflated valuations that are even certified by renowned auditing firms ! ~ remember the infamous Maytas and Satyam Real Estate Valuation Report of Rs 6000+ crs by a Big Four Auditing Firm that was prepared in just one day to facilitate the merger of Maytas into Satyam to fill the hole of an equivalent amount !!! Check my many blogs on this in the category of ‘Satyam ~ The sordid Asatyam Saga’
Veritas Analysts are Tearing Up the way certain Revenues,Expenses,Assets and Liabilities are presented in the Financial Statements or simply not disclosed properly to reach conclusions that the Company is weaker or not as strong as the Statements Portrays
It’s just that they have upped the stakes and are targeting the FIIs who can afford to pay big Money to make some Quick Big Money ! ~ All their Reports are Damning ones ! Why no ‘Buy’ Reports !? ~ It’s a quirky combination of timing High Stakes Play before Report Release and then letting the Herd Investor Psychology come into play
This brings into debate also the Role of the Statutory Auditors ~ even if they argue that their scope is restricted ~ While studying for Chartered Accountancy Examinations we are taught at the outset itself to look for substance over form and Materiality ! ~ so the form may be permissible by current laws and standards but the substance has to be seen as whether this leniency has been misused
The Accounting and Auditing Fraternity has prescribed fairly robust Accounting Standards and globally now the more stringent IFRS is subscribed too and will become globally applicable soon,even in India ~
IndiaBulls has no real history of a few decades like the House of Tatas or any domain expertise like Infosys and TCS to justify it’s fast rise in the past few years
In fact in July 2008 I had blogged on the Clear Indication of Insider Trading that had involved IndiaBulls’ Co-Promoter Sameer Gehlaut’s Investment in Rajiv Shukla’s (Ex Media Journalist and Now Congressman,Minister,IPL and BCCI Chief) Bag Films ~ Reiterated this in relevant posts after 2008 too
In my View,neither sides are Saints and they don’t profess to be either ! ~ both,Veritas and IndiaBulls are out to make Big Monies ~and in my view,at any cost !
Am going through Veritas’ arguments to see if there is real merit in their titling their Damning IndiaBulls Report so strongly as ‘BILKING INDIA’ and also examining trading patterns of price and volumes of IndiaBull Group Companies on crucial dates in July and August 2012 to see if there is evidence of Insider Trading or Abnormal Shorting before Veritas released the report,first selectively and then a wider release with Media appearances too.First look shows there is more than meets the eye !
It’s perfectly legal to create research and sell it and it’s a feather in the cap if it is influential to cause strong price reactions ~but it is unethical and criminal to implement a premeditated plan to further vested interests and deliberately create such reports,with insiders shorting first and then a wider dissemination of the Report through media to cause a panic and further price reactions for Insiders to benefit from by covering shorts !
Remember the practice of a few experts advisors on stock channels ! ~ they first brought the scrip they recommended and then advised it strongly on stock channels to create frenzied buying ~ those were bullish times too ~only for them to offload their own earlier purchases to the unsuspecting buyers ! SEBI pulled some of them up too and fined them ~ yet they kept appearing on the Channels !
IndiaBulls have responded swiftly and aggressively filing a FIR in Gurgaon against Veritas and the two Analysts ,who’s anticipatory bails have been rejected ~ IndiaBulls clearly feels the title BILKING INDIA should apply to Veritas and not them ! ~ I reiterate that they’re clearly and menacingly roaring ” Don’t Mess with us !” ~ one could easily substitute the word ‘Mess’ by the other more notorious four letter word in the English Dictionary that begins with ‘F’ !
Aggressive Punters and Contrarions may see this an an Opportunity ~ I see a Red Flag being raised higher than before and Charging Bulls may just get speared !