Under attack from Canada-based Veritas for alleged governance lapses, IndiaBulls group today accused their research head of profiteering by helping subscribers to enter short positions ahead of the wider release of the report.
According to an official, “Heavy short positions were built up in the stock ahead of the release of the report on Wednesday enabling people to take home profits by squaring off when the prices fell.”
“Police have booked Mr Neeraj Monga, Mr Nitin Mangal and Veritas Research Corporation under Sections of 383, 384, 420, 500, 506, 511 and 120B under FIR No 99 dated 8th August 2012. Indiabulls officers filed complaint to the police against malafide Veritas report along with an email evidence where Mr Neeraj Monga has demanded money through his personal email and that if monies are given in time then he would hold back the report,” the group said in a statement published in popular email group Stocktalks.
The statement further said that Veritas report dated August 1, 2012, was released to certain select group of people before and was released in media and to the institutional shareholders after 7 days on the 8th August 2012 along with a TV interview on 8th August by Mr Neeraj Monga. Monga openly tried to distort facts and presented erroneous data in his answers for fulfilling his personal agenda of profiteering, the statement alleged.
In response, Veritas said: “Veritas is an independent research service provider to institutional funds. Our business model is to sell research for a subscription fee – which is the standard model all independent research providers the world over employ. For subscribers to our research – our clients – we provide the full research report for their investment action. For non-subscribers and prospective clients, we only make available a summary of our report.”
According to the research firm, “This is the same practice followed by all investment banks who distribute their research to their clients. Investors have the option to subscribe to our research, or not; just as they have the option to trade with brokerage houses for their research. There has been significant market impact from our Indian research, presumably because our work and its findings are of interest to the investment public. We produce both buy and sell research, and do not have any proprietary trading positions, and have an eleven year track record as the leading independent research house in Canada.”
Veritas does not have any office in India. Indiabulls officers have also initiated complaints against Mr Neeraj Monga, Mr Nitin Mangal, Veritas Research Corporation and their accomplices to the other investigating agencies in Canada for causing harm and injury to Indiabulls companies and its shareholders, the company statement said.