We published on Sunday an article "INDIABULLS PROPERTY INVESTMENT TRUST: Leaving behind a trail of horror", which triggered a string of comments in a stock forum on Facebook. We reproduce a selection of those comments, and here's a table that sums up the bloodbath for shareholders of the trust:
| ♦ Gored to death (nearly) | |
| If you had bought at IPO for $1.00 | Your loss (based on mandatory offer price): 95%* |
| If you had bought at IPO for $1.00 & subscribed for rights, your cost is 70.9 cts a share (pre-consolidation). | Your loss (based on mandatory offer price): 93%* |
* Does not take into account small amounts of dividends paid.
Mandatory offer price is 25 cents, which works out to 5 cents pre-share consolidation.
Mano Sabnani.Mano Sabnani: This is terrible beyond words! SGX can do nothing to alleviate the pain of minorities. The raw deal comes at a time when the commercial property market in India is rebounding.
Kit Whye Chan: Yes, this is more than just horror. The relevant authority must investigate, but Singapore style is always "this is a commercial issue". At least the relevant authority must investigate if there was, in the past, any fraudulent act behind the transactions and operations. The annual report looks impressive, and unaware investors may be caught by the sweet statements.
Ck Lye: Business trust has no criteria that the trust must pay dividend so hopefully investors know about this....
Chan Kit WhyeKit Whye Chan: What lessons do we learn from this horrible ending? For me, read annual reports with a pinch of salt; don't rely to much on foreign board members when they present company information, or when they answer your questions at AGM; don't accept independent directors will help when company is in bad shape, they only look after themselves and their self-interest. To sum it up, who could we trust within the company which we invest? Nobody!Tan Peng Hock: Beside listening to the management, we also need to understand the business or the properties we invested... India or China is overhyped, and many gets burned.. Same goes to oil and commodities, and properties... Equity investment is very dangerous game itself.
Peh BK Roland: Never buy an ipo without existing earnings. Haven't investors learn Sunshine empire incident where the buildings are still at "planned" stage but not built. Just another classic incident to form a new case study.
Mano Sabnani: Offer is at 25c while NAV is in excess of $1.60
Zach Zach: And the winner is....
Martin Lee: Some news about the parent company: A Negative Stock Report About Indiabulls Led to an Analyst’s Arrest and a 2,000-Mile Odyssey
