Veritas Man Who Clobbered Indiabulls Taken In Custody – The Economic Times – 27-No-2014

December 2, 2014 - Uncategorized

In the summer of 2011, the banal, and often predictable, world of Indian stock analysts was shaken by a report that made a scathing attack on companies run by the Ambani brothers. It was released byVeritas Investment Research Corporation, a little-known Toronto-based equity research firm. The media lapped it up while a spokesman for Reliance Communication, one of the firms covered in the report, described the analysis as a “malicious and motivated report masquerading as research.”

A year later, Veritas came out with its second report — authored by two Indiaborn analysts Nitin Mangal andNeeraj Monga — accusing the realty and financial services group Indiabulls of sacrificing corporate governance practices to enrich key shareholders. The Indiabulls brass was less forgiving than the Ambanis.

On August 8, 2012, Indiabulls filed an FIR against Mangal and Veritas executive vice president Monga with the Gurgaon Police in Udyog Vihar police station; and, two years later, on Tuesday, Nitin Mangal surrendered before the police.

A Gurgaon Court on Wednesday remanded Mangal, a consultant for Veritas, to six days police remand. Mangal — a chartered accountant who had worked with Edelweiss Capital, ACC Ltd, KEC International and Batliboi & Purohit — was accused of extortion, forgery, criminal intimidation and offences under relevant sections of the Information Technology Act.

The development assumes significance as this is the first time that an analyst of an equity research firm has been arrested in India. “Nitin has been implicated in a totally false and fabricated case. The case is a fallout of influence exerted by the company.

It is preposterous that Nitin has been faulted for giving an independent research report,” said Chetan Mittal, one of Mangal’s lawyers. Indiabulls officials did not comment on the matter as it is sub judice. Monga no longer works for Veritas. In July this year, he floated his own research outfit, Antya Investment Inc, in Canada. After the case was registered, Mangal had applied for anticipatory bail in the lower court which was turned down. He had then approached the Punjab and Haryana High Court which on December 3, 2012 refused to grant any relief. Mangal had also failed to obtain relief from the Supreme Court.

Since then the Gurgaon Police had been obtaining arrest warrants against Mangal who eventually surrendered on Tuesday evening. “The court has given us six days to question and interrogate Mangal,” Sub-Inspector Rani Devi told ET over telephone. When asked about the possible course of investigation, she said, “We have to recover the laptop, his mobile phone which was allegedly used in an attempt to extort money from the company (Indiabulls).

Also, his bank transactions will be scrutinised and mails received/sent to the company have to be recovered.” Mangal will be produced before the Magistrate on December 1 again. Indiabulls had alleged that the report by Mangal and Monga was released “without ascertaining the facts” and “had caused huge loss to the company”. It was further alleged that the report was prepared “with an intention to extort money from the company” and when Indiabulls “did not succumb to the illegal demand of the accused, the report was made public on August 8, 2012.”


The Economic Times

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