Today you got to hear / read the Nitin Mangal story on Wall Street Journal. Some of you who are young and idealistic may have found the story shocking. Some of the slightly more older people may have heard some such stories earlier. Some of you may think I am sceptial of cynical – well most of my posts say that right?

Well in this country ‘audit’ and ‘equity research’ are risky. One person known to me was killed for wanting to do a cash audit. Not wanting to get into too much details, but it was a big company and yes, he was punished with death. Not sure after that what happened to that audit. Long long ago in the 1980s so there was no great media outrage. It was just a statistic. As usual.

A few of us were asked to sit with police protection as a bunch of 8 employees were sacked due to corruption. We in audit had discovered that. Promoters are very happy when you catch the small employee cheating the company. This means the promoter can suck far more. That company went to BIFR, but of course the promoter travels in a luxury car.

“Subra your report must be accurate..the promoter is jumping up and down” said a very big merchant banker. I met the promoter. He asked me “how is it that my RM costs are going up and Selling Price is coming down”. I told him…this is just sensitivity analysis. That actually happened about 5 years later. However my research report was commissioned by a guy who wanted a 90 day ┬árisk exposure on the company. The minute he realized that it may go below issue price, he had dumped me. I still hear the gratitude in his voice.

So when I read Mangals case I can appreciate…hmmm…

by the way I have never been a shareholder in this group. I have never heard anything smart / great about this company……

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