The SA contributor, which has harshly criticized Ebix's (EBIX -4%) accounting more than once in the past, now says it has "discovered material and growing holes in Ebix Singapore's Balance Sheets and Statements of Cash Flows".
Among other things, Gotham asserts there's a $27M "unexplained irregularity" in the unit's 2011 related party loan liability, $44M worth of cash flow irregularities from 2009-2011, and a $64M gain from a "sham transaction" involving two Ebix subsidiaries.
Gotham also says it has uncovered major accounting issues at Ebix's Swedish unit. It believes Ebix's Swedish earnings "are less than 1% of the $6.3 million and $7.0 million pre-tax earnings claimed in Ebix's 2011 & 2012 10K filings," and points out the unit was recently liquidated due to a failure to make timely filings.
The author suspects auditor Cherry Bekaert failed to do its job, and believes Ebix "meets the requirements for a default on its credit facilities and loans."