An article in "The Globe and Mail" a Canadian media house website, titled "Toronto research firm rocks clubby world of India Inc." (read article), is revealing. It talks about manipulative accounting, poor disclosure practices, siphoning of funds, poor quality balance sheets and other gaping flaws in transparency at major Indian real estate, communications, and infrastructure firms including IndiaBulls, Kingfisher Airlines, DLF and Reliance among others.
The research firm specified in the article above is Veritas Investment Research Corp, which in relation to DLF, points to questionable related-party transactions, aggressive and conflicting accounting policies, self-enrichment and inability to deliver on promises, and a balance sheet stretched to the limit, with no free cash flow and no credible plan to de-lever its balance sheet. It further states that "If your investment decision incorporates management integrity, then bypassing DLF will be an easy choice."
The article further quotes from credible sources to isolate the problem, attributing it to concentrated ownership or controlling entities, such as family groups or the state, which makes it fertile field for tunnelling or diversion of wealth and other private benefits of control.
A must read!
References
1. Singh, Shalini; "Behind Robert Vadra's fortune, a maze of questions" The Hindu, New Delhi [Oct 08, 2012]; <http://www.thehindu.com/>
2. Nolen, Stephanie; "Toronto research firm rocks clubby world of India Inc.' The Globe and Mail, [Aug 21, 2012]; <http://www.theglobeandmail.com/>
The research firm specified in the article above is Veritas Investment Research Corp, which in relation to DLF, points to questionable related-party transactions, aggressive and conflicting accounting policies, self-enrichment and inability to deliver on promises, and a balance sheet stretched to the limit, with no free cash flow and no credible plan to de-lever its balance sheet. It further states that "If your investment decision incorporates management integrity, then bypassing DLF will be an easy choice."
The article further quotes from credible sources to isolate the problem, attributing it to concentrated ownership or controlling entities, such as family groups or the state, which makes it fertile field for tunnelling or diversion of wealth and other private benefits of control.
A must read!
References
1. Singh, Shalini; "Behind Robert Vadra's fortune, a maze of questions" The Hindu, New Delhi [Oct 08, 2012]; <http://www.thehindu.com/>
2. Nolen, Stephanie; "Toronto research firm rocks clubby world of India Inc.' The Globe and Mail, [Aug 21, 2012]; <http://www.theglobeandmail.com/>
