Sales grew nearly 20 times.
Today, the share is down 86%.

What happened in between?

A small company listed on the SME exchange.
Its sales: ₹21 crore.
Three years later: ₹408 crore.

Everyone clapped. Nobody asked how.
Because that is how we are.
When a number falls, we ask ten questions.
When a number jumps, we throw a party.

Then SEBI asked.

Here is how it was done, as per SEBI’s order:

Step 1: Buy companies born yesterday.
The company announced it had bought three “telecom and infrastructure” companies.
They were 6 to 9 months old. Same address. Not one financial filing. GST cancelled within a month.
The cheques to buy them? Never presented, the company itself admits.

Step 2: Let them “sell”.
Soon these three gave about three-fourths of all sales.

Step 3: Sell to yourself.
A key customer of these subsidiaries shared the company’s registered office.
It used the MD’s email ID. The MD could sign its bank account.
Its directors were labourers. One told GST he had never been to Mumbai in his life.

Step 4: Move the money in a circle.
About ₹40 crore was raised from investors.
Most of it flowed to that same customer and to a manpower firm NSE could not find at its address.
Then the money came back to the company, in the form of sales revenue.

Step 5: Paper the audits.
One audit report carried a CA’s signature. She says she never did that audit.
The next year’s audit was signed in the name of an 84-year-old partner. His family says he was in hospital, then bedridden.
Even the firm’s name was misspelt on the letterhead.
Quarterly review reports got their UDINs on the day SEBI asked for them.

Even a real customer was inflated: ₹24.6 crore booked from Airtel. Airtel says ₹7.2 crore.

SEBI says about 73% of two years’ sales were overstated.

The company: Kore Digital.
Promoters barred. Forensic audit ordered.

My view:
Frauds don’t hide in losses.
They hide in growth that everyone is happy to believe.

So whenever you see exceptional numbers anywhere, be careful.

1. What is the source of it? Is it realistic?

2. Who has examined it? Can we trust that check?

3. Most important: has it turned into cash?
Have the assets actually arrived?

Your signature is your career.
Never let it travel without you.

What do you think, where did things go wrong? Share your view in the comments below.