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Stocks

Suckered: We Did Not Audit This, Say Auditors of C Mahendra Exports

Last Year I wrote about “Chipkaofication” and a stock called C Mahendra Exports had seen its stock go from the Rs. 60 levels to Rs. 240, when it sold shares to Bennett and Coleman (the owners of the Times of India and other media properties), and then the stock promptly collapsed.

Yesterday, we see this news on a newspaper:

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The auditors have basically said they didn’t sign off the financial statements, and they haven’t audited the company!

What a mess!

Not that you would want to buy this company, but if you did, you’ve been suckered.

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  • Shan says:

    How many people are going to jail for this? I guess 0? That’s the sad part about investing in India.

  • R Varadarajan says:

    It surprising that Bennett & Coleman did not do a due diligence study on the affairs of C Mahendra Exports, before buying the shares at a such high price which had shot up nearly 4 times in less than a year !!!

  • Robert says:

    And they say, equity is not a large part of common man’s saving/investments.

  • Vamsy says:

    I wouldn’t say that Bennett Coleman has been sucked who did not do due diligence before investing. This is a usual kind of shady under the desk business. Why, Bennett did not even bother to cry wolf as it doesn’t want to get caught with its pants down!

  • Kamal Garg says:

    The investment story Bennett Coleman & Co. Ltd. is intriguing. People in general believe that if there is an institutional/corporate body like BCCL, then, they expect that due diligence has been done and the investment proposal is worth consideration. It has opened my eye. I actually came across an investment proposal where BCCL had invested a large money in that business. I did not make investment because I felt that the whole story of business proposition was not credible, financial projections were too optimistic and valuation were very high. Thank God, that my vigilant approach only saved me and my investor friends (who would have relied upon my judgement and made similar investment in the same business proposition),

    • BCCL is probably not paying cash anyyhow – could have been some strange agreement about money against ads or some such. We don’t know that side of the story, but I agree that they are not great allocators of cash anyhow.

  • Anil says:

    Sir,
    This must have been bought with some understanding. B&C are not so naive.

  • Rohit says:

    Chart is not Bonus Adjusted

  • Prashant says:

    BCCL generally enters into agreements with many of its customers where it acquires small equity stake in exchange for ad slots in its newspapers. This could be one such deals.

  • Keshav says:

    Deepak,
    How does this CRESTA fund become sucker in all such stock ? What is this fund ? Is it money laundering stuff ?
    Regards
    Keshav