Eros International: On-The-Ground Research, Employee Interviews, and Private Company Documents Expose Egregious Accounting Irregularities
Yesterday, Eros’s key Indian operating subsidiary had its credit rating lowered 10 notches to “default” by CARE ratings, the second largest Indian ratings agency. The issue, according to CARE was “a slowdown in collection from debtors”. The default occurred just as we were completing an investigation that sought to explain precisely why Eros has been persistently unable to collect receivables from its debtors. After extensive on-the-ground research in India, interviews with multiple former employees, and a detailed review of Indian private company filings, we believe the underlying problem is that a significant portion of Eros’s receivables don’t actually exist. We have uncovered details of highly irregular related-party transactions. For example, Eros has directed $153 million to a supposed production company based in tiny office located in what looks to be a rehabilitated Mumbai slum. The entity is operated by the brother-in-law of Eros’s Chairman and CEO. We have also documented…
Predictive Technology: 95%+ Downside on CEO and Former Chairman’s Past Securities Fraud Allegations, Acquisitions That Reek of Insider Self-Dealing and Dubious “Miracle Cure” Sales Tactics
Predictive’s key original holders and recent Chairman/director have previously been charged by regulators with securities fraud, including allegations of pump and dumps, boiler room sales, and false press releases. Predictive’s CEO Brad Robinson has a checkered history, including allegations of securities fraud and of non-compliant marketing of a medical product. Predictive has embarked on a flagrantly suspicious acquisition spree that displays hallmarks of insider self-dealing. Specifically, 4 of Predictive’s 7 acquisitions were entities based out of Predictive’s own address before they were acquired. Predictive’s revenue is derived almost entirely from sales of stem cell products, a business that appears to be predicated on (i) sourcing birthing tissue from pregnant women who wrongly believe they are donating it to purely non-profit causes, and (ii) aggressive “miracle cure” sales tactics targeted toward elderly customers suffering from chronic pain. We attended a sales seminar held by one of Predictive’s largest distributors, run by a doctor…