Reacting to the Veritas recommendation of a ‘blanket’ sell on Indiabulls stocks, the company has reacted sharply blaming Veritas report to be factually incorrect. The group responded to the report by saying it will initiate ‘appropriate criminal proceedings on the authors of the research report for publishing false and factually incorrect data.’
Veritas came out with a research report which said that the sole purpose of Indiabulls Real Estate is to benefit select investors. The report stated that the “disclosures at Indiabulls Real Estate Limited and Indiabulls Power Limited are unreliable and that the sole purpose of IndiaBulls Real Estate Limited is to bilk institutional and retail investors for the benefit of select insiders.”
Veritas claims that given the findings, based on analysing 57 group companies including private companies of controlling shareholders, 201 financial and legal documents including annual reports, annual returns, various schemes of arrangements filed in Indian courts, stock exchange filings etc., any valuation opinion on either IBREL and IBPOW is bound to be erroneous.
Not only does Veritas believe that the merger of Indiabulls Infrastructure Development Limited with IndiaBulls Power Limited is a ‘means of transferring value from the public shareholders of IndiaBulls Power Limited to a select few’, but also that any boost to net worth of IndiaBulls Power Limited claimed by management post-merger is unverifiable.
According to Veritas, “Investors seeking reliable and credible information on IndiaBulls Real Estate Limited and IndiaBulls Power Limited cannot depend on the reported financials of the two companies.”
Shares of Indiabulls Group companies pared most of the intraday lows after reacting sharply to the Veritas report. Indiabulls Real Estate fell as much as 17.3 per cent before recovering. While Indiabulls Financial Services was down 2.2 per cent, Indiabulls Power Ltd plunged 4.4 per cent on the stock exchange.
Veritas had earlier issued highly critical reports on companies including Reliance Communications and DLF.
