The issue between the Indiabulls Group and Canadian research firm Veritas seems to have escalated with the group saying that it had submitted ‘e-mail evidence’ to the police regarding money demanded by a Veritas analyst for holding back the scathing report published on Thursday.

Stocks of the Indiabulls Group declined after a Veritas Investment Research Corp, in a report, recommended selling all shares in Indiabulls Group on concerns of lack of disclosure and corporate governance, reports said.

“The sole purpose of Indiabulls Real Estate is to bilk institutional and retail investors for the benefit of select insiders,” the report titled “Bilking India” said.

“The controlling shareholders are running the organization as a piggybank, while proclaiming propriety and espousing credibility,” analysts led by Neeraj Monga at Veritas said, according to reports.

The merger of Indiabulls Infrastructure Development Ltd. with Indiabulls Power is a means of transferring value from the public shareholders of the power unit to a select few, the note said.

“By not consolidating many subsidiaries in its publicly-filed financial statements, management has cherry picked profits and excluded egregious losses from its publicly-filed consolidated financials,” the report said.

The Toronto based research firm is known for its severe criticism of companies such as Reliance Industries, Reliance Communications and Kingfisher Airlines.

Reacting to the report on Wednesday, Indiabulls said in a statement that it “will initiate appropriate criminal proceedings on the authors of the research report for publishing false and factually incorrect data, to create sensation and entice people for benefitting through trading, for the sole purpose of selling their research reports for money.” 

“We firmly believe that this is not an oversight but an intentional act for profiteering,” Indiabulls added.

Strongly criticizing the report Indiabulls said, “The allegations made are factually incorrect and have ignored disclosures in public domain made through the annual reports of FY 2011 and FY 2012, which have also been circulated to all shareholders.”

On Thursday, the company said it has also initiated complaints in the North American country against the research firm and two authors of the report — Neeraj Monga and Nitin Mangal.

In a regulatory filing with the BSE, Indiabulls Real Estate said, “Indiabulls officers filed a complaint to the police against malafide Veritas report along with e-mail evidence where Neeraj Monga has demanded money through his personal email and that if money is given in time he would hold back the report.”

Reports said that Indiabulls officials have initiated complaints with investigating agencies in Canada for causing harm and injury to the group and its shareholders.

Reports added that that Veritas analysts never spoke to any person at Indiabulls for any clarifications or facts and have never visited any of its power plants or real estate sites before releasing their commentary, as admitted by Monga himself.