IndiaBulls Group is BILKING INDIA say Veritas ! ~ There’s more than Meets the Eyes on both sides !

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

  1. 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! ?
  2. 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

  1.  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!”

When I wrote for leading Stock Publications in the past,for the benefit of Lakhs of Investors I have often exposed traunt listed companies and their unethical and fradulent  and manipulative operating and accounting practices~ Of course I’ve been threatened to be sued often until evidence is shown to the Companies and they back off ! ~ Scales and Stakes were in lakhs or a few Crores then unlike now where we are seeing hundreds and thousands of crores of rupees being raised in dubious ways and spend dubiously too ~ This Role of playing Watchdog  is the Responsibility of the Regulators and the Exchanges  ~ Let’s just say that only of late have they been bit by Conscience ! ~ otherwise only the small fry was fried ! ~ also the blatant and shameless rape of Investors by unscrupulous promoters and their network often has strong political patronage ~ and is supported by some in the mainstream  media,broking  and banking world
Let me make it Clear though ! ~ I am not a Share Activist ! neither am I associated with any such Activism ! ~ the reason being the prime objective of any analysis I do of Companies in our Capital markets is to see if they merit Investment ~ my job is to make Monies for my Clients by investing in Winners and staying away from Losers or Controversial and Manipulated Companies ~ It’s nothing personal ~ I do not defame Companies ~ don’t really have to as many Promoters effect this Role well themselves !
But What I do do ! is caution readers of my blog on certain companies that I feel may strangle them ! ~ Karuturi Global @ 25 (now 4 ! and was touted by many as a multibagger on big stock channels as Company gave ads on these channels ) or Cranes Software @ 25  (god knows what it’s now)

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 !

15 thoughts on “IndiaBulls Group is BILKING INDIA say Veritas ! ~ There’s more than Meets the Eyes on both sides !

  1. Veritas’ primary customers seem to be short sellers.

    So far, Veritas is right about all – Reliance, DLF, King fisher, and now Indiabulls which is yet to be proven.

    We need more such reports (eager to see more reports from India) so that the tagline, ”In India, Companies may fall sick but promoters rarely do!” is no longer true and are shareholder friendly.

    Most of our market/corporate professionals need to be thoroughly cleaned. Throw them in Arabian sea or Ganga?

  2. Hi Chris,
    Insted of cleaning others or throwing them ,why shouldn’t we clean & educate our mind so that we can stay away from such managements/professionals etc,why blame everyone else except self ?

  3. Hello sir I was thinking of asking you to write a blogpost on veritas only sell reports. Thanks a lot. In fact, ok they can charge fees for giving research report nothing wrong in it but what raised my eyes is why they are publicising on the tv channels which they have sold at good prices to their clients.

  4. Hello sir I was thinking of asking you to write a blogpost on veritas only sell reports. Thanks a lot. In fact, ok they can charge fees for giving research report nothing wrong in it but what raised my eyes is why they are publicising on the tv channels which they have sold at good prices to their clients. I keep away from the companies which tv experts recommend regularly and strongly for the reasons you cited. Thanks for your such a caring and compassionate behaviour for the retail investors like us.

  5. Thanks to Veritas brave duo atleast someone had the guts to explicitly expose the underbelly of Indias crony capitalists.lets encourage them n pray more such brave souls come out.lets not discourage them

  6. As advised by you I sold NhPC after it got dividend. Good riddance I would say.could you please suggest some good switching candidates which wud help me in recouping my losses. I was foolish enough to invest in Nhpc @ 36 in IPO

  7. Hemant,

    Hopefully you are not one of those!

    When so many biggies are into all kinds of scams, we should find ways to clean them up. How long we can keep away from such characters when you see only such?

  8. Mr. Gaurav,

    I just wanted to ask you after raising question on Veritas business model, how you make money and other broking houses and investment bankers in India. In case if you are not aware, the report first goes to paying clients and after sometime it released to mass. So whats wrong in that if Veritas is doing so. Till the time these guys are writing truth we should support them, dont you think that we need more analyst like them for getting better research. Also, I am sorry to say but you have manipulated the wording of mail between Veritas and Altima Partners, the real sense of mail was something else. Now question is why they write only sell report, so if you referred to recent interview of Neeraj Monga he said that our next report is buy and just remember one thing, that these guys takes atleast 2-3 month ( as per there past record) for a report so its not the story what he was making post IBULL episode, they must have already started working on the same. I know few guys in media, they always tries to chase all biggies so that they can have a story. It appears that in this article you are cribbing because you do not get so much Media attention and not to have so many followers.

    1. Ouch! Vicks! ~ at the outset appreciate your response ~ neither hold a brief for Veritas nor for IndiaBulls Group ~ no issue also with benefiting from paid research ~ but question ethics and motives on releasing it later to the media for wider dissemination ~ as simple a plan,and a widely prevalent practice too, as you buy or sell first and then spread the word,wider through the Stock Channels on TV ~ if,as you say,you are familiar with some in the media,I’m sure you must also have got a sense of how wickedly the Media nexus can work at times!~often there is a thin line that separates insider trading ~ however more importantly am going through Veritas arguments to conclude if there is merit in titling their Report so aggressively as’BILKING INDIA’ ~ you need strong evidence to support this conclusion of deceit and fraud ~or did Veritas have strong vested interest in doing so ~ as far as your dig at me for not getting much Media Attention and not having many followers,I crave for neither~ have turned down requests to appear on Shows where you have to parrot or toe a given line when expressing yourself !~my blog is an expression of self and on not just stocks~ perhaps if you acquaint yourself with my posts over time,past,present and future you may get a better sense of me and what I stand for ~ perhaps you may get to like me !…I said perhaps ! ~ Cheers and once again thanks for taking the trouble to respond

  9. Thank for Response Gaurav, I sincerely feels that the title bilking India suites IBULL after going through full report of Veritas, whereby they highlighted two major point. 1. They showed that how the funds of Listed companies used by the promoter to increase there holding.
    2. The subsidiary of IBREAL issued shares to foreign investors (there companies might be acting as a front for them) at through away price and thereby so called foreign companies made 5x money in less than a years time. Also for your information Veritas does not have any proprietary fund or investment baking arm. I have seen there profile and also got feedback from some of the Canadian funds they says that they are only a independent research house which sells its research for a subscription and even have some government organisation as client. Also, they mentioned about their work on few of the Canadian companies whereby they highlighted serious corporate governance issues and over the years those organisation crumbled. You can read story at this link http://www.theglobeandmail.com/report-on-business/rob-magazine/timminco-how-eric-sprott-got-solar-burn/article4502829/

    Please also don’t take what i wrote personally as my intention was not to hurt you but just make you aware that these guys does not have any bad practices and are very ethical in terms of their work.

    I did saw some of your stories in past and really appreciate our research.

    Just wanted to correct you on this.

    Thanks and all the best

    keep doing good work

    1. Amit ,RattanIndia Infra (FV Rs 2) Share Price Rs 2 and Mket Cap under Rs 300 crs,derives it’s value from the 40% it holds in RattanIndia Power (FV Rs 10) with Share Price Rs 7 and Mkt Cap over Rs 2000 crs…so clearly there is a huge haircut on this Holding…..Both were Indiabull Group Companies and now the Power Segment is with Rajiv Rattan…..The Power Company is facing huge issues with it’s two plants in Nasik & Amravati….the Plan was for 5400 MW Aggregate Capacity but even the Phase 1 completion of 270MW Units are facing operating issues because of problems in Coal Supplies…the company needs 4000 tonnes of Coal a day to operate just one unit and there are risks and even legal issues to transport the same by road from it’s Walgaon depot….Coal India has been unable to supply…..Further Phases will only be considered after PPA & FSA are finalised….All New Power Plants in the past five years are facing such issues and are burdened with a heavy Debt overhang with no immediate solution to regular Coal or Gas Supplies,fair PPA and land acquisition for further plant aggregate capacity building in sight…..The Group also has been perceived to be a controversial one with it’s fast track growth in diversified segments seen to be because of then government largesse…Next two to three years will be defining ones for RattanIndia Power Company.

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