- 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."
- Ebix is being investigated by the SEC and a U.S. Attorney office, and reportedly the FBI.
at MarketWatch.com (Oct 14, 2014)