Forensics and the art of triangulation

(Gaurav Agarwal) #224

(Krishnaraj) #225

The alleged fraudster is a close relative of an influential leader of the ruling party, the latter denies that the fraudster was wrong.

The fund has to say this,

It is simply ridiculous that the Indian system can move so slowly,” Singh, whose assets under management have slumped to less than $1 billion from $14 billion in 2008, said in an email interview. “The entire country’s reputation will suffer badly”

(Gaurav Agarwal) #226

(Krishnaraj) #227

This is such a fantastic piecing of the Singh brothers highlighting the inner workngs of their empire, intertwined with a Godman and ultimately leading to ruin.

Absolutely brilliant story and tragic at the same time.

(Krishnaraj) #228

Watched it along with the story on Valeant and VW. Simply brilliant, thank you for recommending.

(Krishnaraj) #229

SEBI came out with its order on Ricoh India Ltd essentially summarizing the findings of the forsensic audit by PwC.

I have always been looking for a detailed forensic audit report, but this one come really close. The details are so revealing that I can almost imagine the CFO telling his co-conspirators, " what kind of morons we have for shareholders"

For instance,




Happy reading, here

(Krishna Chaitanya) #230

Hi everyone,

When I was scouting for budding new companies in my area of knowledge, I came across a company. It manufactures bearings. The company name is Galaxy bearings. I started reading Annual Reports.

I have a doubt here. In the first available annual report they appointed 4 independent directors.

In the explanatory statements it is understood that two of these independent directors have multiple directorships in very small companies ( the company in consideration it self is very small).
Please see the Snapshots below.

My concern is whether this is a good sign or can be ignored. What could be their motive in starting/ owning that many companies and not concentrating their efforts in one company. You might have come across such situations.

Please enlighten me.

Disc: Not invested, just starting.

(Krishnaraj) #231

I am not sure any good or bad can be concluded from such ‘related party’ Independent Directors. IDs are rarely independent in India, and rarely act independently, although the presence of one vested with such a duty may be a deterrent to wrong doing, albeit very mild. This is irrespective of size and in larger firms, there is a quid pro quo, or proxies of third parties indirectly controlling, nominated as IDs.

Small firms may just want to have a few trusted relationships leveraged across many firms, so just get the same ones.

This reminds me of a certain Suresh Talwar who used to be on the Boards of 54 firms. In one AGM a shareholder asked whether he even had the time to read the annual reports he signed on :slight_smile:

(VALUE2017) #232

@varadharajanr I think with the recent series of events in Manpasand, vakrangee, PCJ, 8K Miles, etc expert forum members should give their insight in this thread for the benefit of all forum members.

(Krishnaraj) #233

An absolutely stunning $ 500 million heist from the Central Bank in Angola, and how it almost slipped away, and subsequently foiled.

I recall a smaller amount siphoned from Central Bank of Bangladesh a few years ago.

The $500 Million Central Bank Heist—and How It Was Foiled - WSJ.pdf (1.3 MB)

(Krishnaraj) #234

@vivekbothra has done a wonderful analysis on LEEL Electricals, and how management / promoter used their magic wand to make cash dissapear.

Minority investors lose, and the template is a standard one that I have seen used elsewhere too. Studying this will help us uncover such traps (which I have often fallen into), but never fails to stun me :slight_smile:

(Varadharajan Ragunathan) #235

PFA, a presentation I had done in Goa. I think forensics is about understanding the underlying brics of the bs/pl and triangulating it with real numbers that often form a verifiable trail (like the hansel and gretel story) often makes for a well rounded view of the numbers and hence the management’s intentions.

The presentation is only for educational purposes and there no stock specific recommendations in it. I have no interest in discussing any specific companies for obvious reasons. Basics of forensic.pdf (1.1 MB)