Ebix Inc (NASDAQ:EBIX), one of the leading suppliers of on-demand software and e-commerce services to the insurance industry worldwide, responded to the previous report of Gotham City Research that states the company is experiencing new problems in India, Singapore, and Sweden.
Ebix on the allegations
In a press statement, the on-demand software and e-commerce services provider said the allegations and materials included in the report of Gotham City Research against the company are “false, misleading, inaccurate, and without merit.”
Ebix Inc (NASDAQ:EBIX) emphasized that the allegations of the research firm were “recycled” from a previous posting. According to the company, Ebix takes its financial and tax reporting responsibilities very seriously and is confident in the accuracy of its financial disclosures and tax filings.
The company pointed out that its principal and statutory editors in each of the foreign jurisdictions where it has business operations released “unqualified opinions” with respect to its financial statements.
Ebix Inc (NASDAQ:EBIX) said it has a strong balance sheet, world class sales force, and markets leading products. It has remained focused in boosting shareholder value by implementing its business strategy and collaborating with clients in developing innovative technology strategies and solutions to address specific business challenges.
Gotham City Research recently reported that Ebix improperly funded more than $100 million worth of acquisitions and shares buybacks, tax-free using a bogus inter-company asset sale between India and Singapore. The firm also alleged that the company committed new accounting irregularities, which account for 42 percent of its market capitalization.
Gotham City Research claims
In Sweden, Gotham City Research claimed that BDO Sweden cannot confirm if the transactions between the Swedish subsidiary of Ebix Inc (NASDAQ:EBIX) and its subsidiaries in Australia and Singapore actually exists.
In June, the research firm indicated that the shares of Ebix Inc (NASDAQ:EBIX) are likely headed to zero after Goldman Sachs Group Inc (NYSE:GS) abandoned its agreement to acquire the on-demand and e-commerce service provider. Goldman Sachs made the decision after the management of Ebix revealed that authorities opened an investigation against the company.
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Back then, Gotham City Research said the shares of Ebix are “likely worthless.” The research firm emphasized that the company has a negative net cash position, at least $80 million owed to creditors, and potentially owes more than $100 million in tax in the United States.
The shares of Ebix Inc (NASDAQ:EBIX) are trading around $9.89 per share, down by 1.05 percent at the time of this writing.