Veritas, IndiaBulls in slanging match

A war of words accompanied by police complaints and threats of legal notices has broken out between the IndiaBulls group and Canada-based research outfit Veritas Investment Research, which has of late been exposing listed Indian companies on corporate governance issues.

Veritas, which claims to be an independent research company serving institutional investors and funds – and which sells research reports to subscribers for a fee, but does not engage in proprietary trading positions – issued a report on 1 August to its clients, urging them to sell stocks in three IndaBulls group firms.

Almost a week later, the research report got leaked and there was heavy hammering of the IndiaBulls scrips on the bourses.

Reacting to the reports, IndiaBulls accused the Canadian firm of publishing a mala fide and factually incorrect report on its companies. It also filed a police complaint in Mumbai against Veritas and its analyst Neeraj Monga, accusing him of demanding money from shareholders.

IndiaBulls cited an email sent by Monga to a London-based hedge fund, where he sought $40,000 as subscription to the research reports. He allegedly said he would hold back one of his reports by a day to enable the hedge fund to ''read it and take action if you so desire.''

Monga, however, claims that Altima Partners, the London hedge fund, had contacted him for its research reports. ''We have not contacted IndiaBulls before or after our research was published,'' he said. "We are an independent research company servicing institutional investors and funds. We sell research for a subscription fee, as is the industry practice in India and the world over.''