Canadian equity research firm Veritas Investment Research Corp has filed suit in Ontario claiming $11 million from Indiabulls Group in damages, saying that the conduct of Indiabulls caused irreparable damage to their business, reviving the two-year-old legal fight between the two companies, as per a news report by the Mint.
In its suit, filed in August this year, Veritas has alleged charges related to injurious falsehood, defamation, malicious prosecution, abuse of process and conspiracy against Indiabulls.
The suit names Indiabulls Real Estate Ltd and Indiabulls Housing Finance Ltd, claiming $10 million in general and special damages along with $1 million in punitive damages.
Previously, Veritas had hit headlines with strong reports questioning corporate governance and accounting practices in firms like Reliance Industries, Reliance Communications, Kingfisher Airlines and DLF besides Indiabulls. Many of these companies have provided clarifications to the allegations made by Veritas.
The case with Indiabulls goes back to August, 2012 when two analysts of Indian origin Neeraj Monga along with Nitin Mangal released a controversial report titled Bilking India on Indiabulls Real Estate, Indiabulls Power Ltd and Indiabulls Financial Services Ltd.
The report flayed the Indiabulls group companies for ‘bilking’ their investors. The report specifically advised the stock holders to undertake legal actions to ‘claw back the ill-gotten gains’ of the controlling shareholders.
In a strong response, Indiabulls filed a first information report in 2012 against Veritas and Monga and Mangal, saying that “allegations made are factually incorrect”, after which the police booked them under Sections 383, 384, 420, 500, 506, 511 and 120B.
In the complaint, Indiabulls allegedly said that one of the authors had demanded money to hold back the report.
After over two years, Nitin Mangal surrendered before the Udyog Vihar police station in Gurgaon, The Economic Times reported on Thursday. Mangal, who has been accused of charges related to forgery, extortion and conspiracy, has been questioned several times since then by Mumbai police but was not arrested since he was grated anticipatory bail by the Bombay High Court.
Monga no longer works with Veritas.
Founded in 2000, Veritas Investment Research Corp is an equity research firm specialising in buy side research. The firm prefers to research on companies based in Canada and provides its research services to US and Canadian institutional clients.
(Edited by Joby Puthuparampil Johnson)