Nakshatra Hanchate

4 signs
of
a FRAUD
company
Knowing where not to invest
 Nakshatra Hanchate

Too many shell

companies
A company may often create many
subsidiaries, SPVs, and associate companies
with which they do 'business'.

Seeing too many such

companies, especially
in unrelated
businesses
with hardly
any
proof of
existence
is a clear
warning sign.
 Nakshatra Hanchate

Questionable
promoter
integrity
One of the easiest ways to find out if a
company is good or bad is by
analyzing its management.

At last, the people run

a company and drive
its numbers.

Too many court cases,

fraud allegations,
consumer complaints,
etc. are a clear threat.
 Nakshatra Hanchate

Unusually low
cash business
A business is worth anything only if it's
producing cash, like real cash.

Fake revenues, other income, etc.

are areas that a company
can manipulate
to fool invetors.

A low cash to income

ratio and unusually
high receivables
posts an earnings
problem.
 Nakshatra Hanchate

Frequent change
in auditors
Criminals (of any kind) always have a
strategy to cover up their crimes.

And that's where you can

find them.

Auditors are paid by the

companies themselves,
a clear flaw.

A frequent change in
auditors means someone
is trying to cover up too
much.
 Nakshatra Hanchate

Can you think of

more such
signs?
Tell me