2013 03 07 - Ebix All Distraction No Clarity - Final

7/29/2019 2013 03 07 - Ebix All Distraction No Clarity - Final

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GOTHAM CITY RESEARCH LLC www.gothamcityresearch.com [email protected]

GOTHAM CITY RESEARCHGOTHAM CITY RESEARCHGOTHAM CITY RESEARCHGOTHAM CITY RESEARCH LLCLLCLLCLLC

EBIX: All Distraction, No Clarity

You can fool some of the people all of the time,

and all of the people some of the time,

but you cannot fool all of the people all of the time.

Former President, Abraham Lincoln


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Disclaimer:

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Table of Contents

I. DisclaimerII. Background

III. Ebixs 2010 Singapore Long-lived Assets Still Dont AddIV. No Clarity on the Undisclosed Related Party Loan to SingaporeV. US and India Filings Contradict Rainas Confirmnet Explanation

VI. Lies of Omission, Unimportant Facts, and the UnverifiableVII. EBIX All But Admits There is an On-going SEC Investigation


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GOTHAM CITY RESEARCHGOTHAM CITY RESEARCHGOTHAM CITY RESEARCHGOTHAM CITY RESEARCH LLCLLCLLCLLC

a

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"It is better to be roughly right than precisely wrong." John Maynard Keynes

SUMMARY OF FACTS Robin Rainas Inaccurate Claims

Ebix Singapore & Ebix Australias financial statements for 2009 do not support Rainas claimthat an intercompany loan to Australia was moved to Singapore in 2009.

The 2010 Singapore long-lived asset numbers are misstated by at least $67 million (94% of2011 earnings), contrary to Robin Rainas claim that the numbers did not change.

The 2010 Confirmnet acquisition cost inconsistency exceeds $5 million, while Ebixs totalcapital expenditures for 2010 was only $1.7 million. This falsifies Rainas claim that the

irregularity is explained by investments made in Confirmnet by Ebix India.

The unbilled receivables/deferred revenue error Raina pointed out doesnt change that (i)unbilled receivables are growing faster than overall receivables, (ii) reserve for doubtful

accounts is shrinking and (iii) the inclusion of deferred revenue with receivables is unusual.

Rainas Planetsoft & Australian revenue claims cant be verified without more information. Ebix did not file an 8K (nor provide any of the responses in writing), despite the fact that we

identified very serious and material concerns relating to the company and the stock.

When truth is replaced by silence, the silence is a lie. Yevgeny Yevtushenko

SUMMARY OF FACTS Robin Raina Did Not Deny:

Ebixs core business is declining, organic growth is negative, and its balance sheet is weak.Also, the company has never generated lasting free cash flow during Rainas tenure as CEO.

The 2010 & 2011 10Ks were filed before the Singapore 2010 filing was signed off. None of the members of the board of directors reside in the United States, and none of the

audit committee members seem fit to do their jobs.

Less than 5% of Singapores intangible assets are IP-related, & the $66 million undisclosedrelated party loan seems to violate the arms-length principle, invalidating their tax strategy.

The Robin Raina Foundations IRS filings are full of material accounting irregularities.GOTHAM CITY RESEARCHS OPINIONS

Ebixs stock should be halted immediately, as (i) the financial statements remain materiallyunreliable, inaccurate, and incomplete and (ii) Ebixs CEO appears to be intentionally

misleading investors, rather than addressing the issues we and others have identified.

We stand by all the opinions stated in our prior report. Rainas inaccurate statements,irrelevant story-telling, and lies of omission only serve to strengthen our beliefs.

Market participants should avoid buying or holding Ebix shares.


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Background

On Thursday, February 21st, 2013, Gotham City Research released its first report on Ebix. In it, we

explained in great detail why we believe (among other things)1:

Ebixs financial statements are unreliable, inaccurate, and incomplete. Ebix will restate historical results, likely significantly. Ebixs stated tax strategy is a sham in fact, if not in substance. Cherry Bekaert Holland should not sign off on Ebixs 2012 financials, without Ebix Singapores

2011 and 2012 filings.

Ebix shares are worth no more than $5.00/share, & approach $0.00 as the event risks unfold.The company responded the next day with a weak press release, consisting of no more than a few

sentences.2 Then last Tuesday, February 26, 2013, Ebix CEO Robin Raina held a conference call hosted by

Craig Hallums Ebix analyst, Jeff Van Rhee3. The call initially sounded promising, as Raina seemed

organized, detailed, & full of conviction. Unfortunately for Ebix shareholders, the responses turned out

to be lacking both in form and in substance. For example:

Rainas 30 second explanation regarding the Singapore loan is not supported at all by theSingapore or Australian filings. Its unsurprising that Raina spent 6 minutes discussing a 2008

intercompany loan to Australia, which is irrelevant to the undisclosed 2009 Singapore loan.

He claimed that the presentation of long-lived assets changed, not the numbers. Yet thenumbers clearly did change, and the Singapore irregularity alone equals 92% of 2011 earnings.

Not only were Rainas responses inaccurate, misleading, and/or irrelevant, he completely ignored some

of the more serious concerns from our original report

4

:

Ebixs core business is deteriorating and its balance sheet is weak. The companys stated tax strategy is a sham, as it is supported by transactions that served no

economic purpose other than to minimize taxes.

The Robin Raina Foundations IRS form 990 returns are full of material accounting irregularities.We do acknowledge that Raina was absolutely correct about one thing: we mistakenly copied and

pasted the wrong numbers onto the table shown on page 14 of our first report (specifically in the row

titled Deferred rev included in A/R). It was an innocent mistake and has been corrected accordingly.

This error does not, in any way, change the fact that Ebixs accounts receivables are of dubious quality.Nor does it change that there are a dozen equally, if not more important red flags that Raina did not

address. For example, the numbers dont add, their tax strategy is a sham, internal controls are lacking,

etc. As Keynes famously said: "It is better to be roughly right than precisely wrong."

Please note: we have more, entirely new material in our possession that we may publicly release at any

time. We urge all market participants to avoid buying or holding shares at all costs.


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Ebixs 2010 Singapore Long-lived Assets Still Dont Add

One of the main reasons we believe that Ebixs financial statements remain materially unreliable,

inaccurate, and incomplete is the very large differences in the 2010 long-lived asset numbers. Namely:

Ebixs 2010 long-lived assets dont add up, between the 2010 and 2011 10Ks. The Singapore irregularity alone is $67 million. This variance is nearly equal to Ebixs entire 2011 net income and over 10% of Ebixs market cap.

On the conference call hosted by Craig Hallum, Robin Raina addressed these points. He claimed that the

numbers did not change between the 2010 and 2011 filings; only the presentation format changed.

As a matter of fact, Mr. Raina is incorrect, as we prove in great detail:

There actually is a very large variance in the numbers, between the 2010 and 2011 10Ks. The presentation changed (but this is an irrelevant fact).

Furthermore, Raina completely ignored other concerns we raised, relating to the long-lived assets:

Not only do the 2010 numbers not agree between the 2010 and 2011 10Ks, neither match thenumber found in the Ebix Singapore 2010 filing1.

2011 long-lived assets on the balance sheet show one number, while Note 16 shows another. The 2010 and 2011 10Ks were filed before the 2010 Singapore filings were signed off.

Robin Rainas False Claims

On Tuesday, February 26th, 2013, Jeff Van Rhee asked about the long-lived assets2:

The point is, the 2010 10K states one number for the 2010 long-lived assets, and then in the

2011 10K, when 2010 is referenced, its a different number for the long-lived assets. Can you

walk through how something like that can change, after it has originally been filed in a 10K?

Robin Rainas full response:

Jeff , there is actually no variance in numbers. Just the presentation format changed

between the two filings. The 2010 10K filing includes specific amounts for goodwill and

intangibles. And then a separate amount for fixed assets and certain other long-lived assets.

The 2011 10K had just, uses a different format in which we lump all the above together under

the heading long-lived assets, meaning, that we aggregated the sum total of goodwill,

intangibles, fixed assets, and some other assets together. The number in the 2010 10K filing,

when aggregated together, would be exactly the same as the 2011 10K filing. So the

presentation changed, not the numbers.


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The Numbers Changed, Contrary to Rainas Claim Otherwise

The 2010 long-lived assets by geographic segment clearly did change between 2010 and 2011 3:

Straight from the 2010 10K (see highlighted):

Straight from the 2011 10K (see highlighted):

2010's Long-Lived Assets - As reported in the 2010 10K vs 2011 10K

thousands $ 2010 10K 2011 10K VA RIANCE

The Americas $98,190 $169,833 $71,643

Australia $545 $1,525 $980

Singapore $134,993 $67,781 ($67,212)

New Zealand $0 $40 $40

India $0 $3,339 $3,339

TOTAL $233,728 $242,518 $8,790

Note 1: EBIX previously reported "goodwill and intangible assets" in note 16

by geographic segment in the 2010 10K. In the 2011 10K , EBIX reported

"long-lived assets" in li eu of "goodwill and intangible assets". Despite

the name change, they are substantially equivalent, as there are no

material long-lived assets beyond goodwill and intangible assets.

Note 2: In the 2010 10K, EBIX reported 'The Americas' whereas in the 2011 10K

started to break out by specific region, i.e. US, Canada, & Latin America.


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The Change in the Presentation of Long-lived Assets Is Irrelevant

While Robin Rainas claim that the numbers did not change is demonstrably false, he is correct in saying

that the presentation changed. Unfortunately, it does not matter that the presentation changed. The

reason is, most of Ebixs long-lived assets consist of Goodwill + Intangibles, as shown below4:

Possible Reasons Raina is Making False Claims About the Long-lived Assets:

Gotham is not entirely sure why Raina made such blatantly false claims. The following express some of

the more likely possibilities:

Robin Raina is not fit to be CEO or Chairman, as his mathematical and accounting skills arewoefully deficient (we doubt this explanation, as we believe Raina is a very intelligent man).

The long-lived asset variance is one of the more obvious symptoms of the underlying problems,and Raina is desperately attempting to delay its unraveling.

There is an explanation for the variances, and it would unravel Ebixs bogus tax strategy,rendering Ebix liable for over $100 million in back taxes, interest, and penalties.

The explanation would reveal massive accounting irregularities, e.g. earnings overstatement.

% Breakdown of Long-lived Assets by Type

2010 2011

Goodwill 74.5% 74.6%

Intangibles, net 9.3% 11.1%

Indefinite-lived intangibles 12.6% 8.8%

SUB-TOTAL 96.4% 94.4%

Property and equipment, net 3.2% 2.5%

Deferred tax asset, net 0.0% 2.7%

Other assets 0.4% 0.3%

TOTAL 100.0% 100.0%

Long-lived Assets by Type

thousands $ 2010 2011

Goodwill $180,602 $259,218

Intangibles, net $22,574 $38,386

Indefinite-lived intangibles $30,552 $30,453

Property and equipment, net $7,806 $8,834

Deferred tax asset, net $0 $9,412

Other assets $984 $1,062

TOTAL $242,518 $347,365


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No Clarity on the Undisclosed Related Party Loan to Singapore

Gotham City Research has thoroughly examined Robin Rainas claims regarding the undisclosed related

party loan to Ebix Singapore Pte Ltd, and believe Mr. Raina provided no answers, and plenty of

distractions.

We are particularly disturbed by the fact that Raina chose to talk about a 2007/2008 intercompany loan

to Australia, rather than the 2009 undisclosed related party loan to Singapore. We believe the purpose

of this was to distract investors. The following facts concern us:

Rainas rather brief (30 second long) and cryptic claim as to how the 2008 intercompany loan toAustralia was transferred to Singapore is not supported by the Singapore or Australian filings.

The 2009 Singapore filing clearly shows an in-flow and out-flow of cash, in the statement of cashflows; these in-flows and out-flows, alone, do not support Rainas explanation.

The 2009 Australian filing shows no in-flow or out-flow of cash, pertaining to the intangible assetsale to Singapore. This isnt consistent with the 2009 Singapore filing or Rainas claim.

The 2007/2008 intercompany loan to Australia was a current liability; the 2009 Singapore loanis a non-current liability.

Raina did not address our belief that the 2009 Singapore loan does not fit the criteria for anarms length transaction, rendering Ebixs tax benefits dubious.

As a result of the above mentioned facts, we believe:

Raina provided irrelevant information, because the tax and accounting implications of theSingapore loan are just as bad, if not worse, than we originally identified.

Raina is intentionally making false statements and providing irrelevant information in hopes thatinvestors who dont verify his claims will buy or hold Ebix stock.

Ebix Singapores Statement of Cash Flows Dont Support Rainas Terse Explanation

Robin Raina posed the following question: How did the loan move from Ebix Australia to Ebix

Singapore?1

Raina then provided the following explanation: Ebix Singapore purchased certain assets and liabilities

associated with the two acquisitions: namely, Hart Consulting and Telstra eBusiness from Ebix Australia.

It accordingly acquired both the IP assets and the loan liability of Ebix Australia in October 2009. Does

that answer your question?

Jeff Van Rhee: Uh, it, it, it, does. I think it does. In more details than I was maybe even

looking for I guess if I summarize your answer, youre saying all of the related party here were inter-

company, these are not external, outside of the ebix-fold companies, but inter-company transactions. Is

that accurate?

Robin Raina answered: Jeff youre 100% accurate.


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Ebix Singapores Statement of Cash Flows Doesnt Support Rainas Terse Explanation

Ebix Singapores 2009 filing does not support Rainas explanation as the statement of cash flows from

the 2009 financial statements, clearly show in-flows and out-flows of cash2:

Raina makes it seem as if Singapore merely assumed the intercompany loan yet the Purchase of

intangible assets (Note 5) within the Cash flow from investing activities shows a clear out-flow of cash.

Then the Proceeds from loan from a related company within the Cash flows from financing activity

clearly shows an in-flow of cash.

The Singapore filings do not show a mere move or transfer of assets and liabilities. It shows a purchase

of intangible assets, with cash that originated from a loan. Remember: the size of this undisclosed loan

was equal to, if not larger than Ebixs entire tangible assets in 2009. 3

Ebix Australias Statement of Cash Flows Doesnt Support Rainas Explanation

The Singapore filings clearly show an in-flow & out-flow of cash related to the purchase of intangible

assets, & a loan that provided Ebix Singapore with the proceeds to purchase said assets. Oddly, Ebix

Australias 2009 financial statements do not show any corresponding in-flow or out-flow of cash. Cash

Flow From Operating Activities, for starters, does not show any transactions that support Raina4:


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Cash Flow From Investing Activities, also does not support Rainas claims:

Last, but not least, Cash Flow From Financing Activities, does not support Rainas claims:


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Raina Provides No Details on the $65.8 Million Undisclosed Related Party Loan to Singapore

Not only is Mr. Rainas explanation not supported by Ebix Singapore and Ebix Australias filings, he did

not provide any details about the undisclosed related party Singapore loan:

Raina did not disclose which exact entity lent to Ebix Singapore in 2009. Raina did not explain who exactly received the proceeds of the loan, from Singapore. He did not reveal what the current status of the loan is. Note that the Ebix Singapore subsidiarys 2011 financial filing has yet to be filed5.

Raina Distracts Investors by Talking about the Intercompany Loan to Australia, Not Singapore

GCR listened to and measured how much time Raina spent discussing the intercompany loan to

Australia in 2008, instead of the undisclosed related party loan to Singapore in 2009. Out of the 6+

minutes he devoted to providing clarity on the Singapore loan, he spent only 30 seconds addressing theSingapore loan. The rest of the time he talked about an intercompany loan to Australia in 2008 6:

AUSTRALIAN LOAN SINGAPORE LOAN

Rain provided: DETAILS NO DETAILS

Time spent discussing: 6 mins, 20 secs 30 secs

% of time spent discussing: 92.1% 7.9%

When the loan took place: 2008 2009


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US and India Filings Contradict Rainas Confirmnet Explanation

In our first report, we pointed out the fact that the Confirmnet acquisition cost 30% more according to

the India filings than it did according to the SEC filings (a difference that is nearly 10% of 2010 earnings).

We expressed our belief that either the US SEC filings are correct, the India filings are correct, or neither

are correct. Whatever the case, the clear implication here is that Ebixs financial statements are not

reliable, accurate, or complete.

Raina addressed our concern, with perceived clarity. Unfortunately, we find his explanation inconsistent

with the facts. The following specifically concern us:

Robin Raina claims that any variance between the US and India filings is explained by additionalinvestments made in Confirmnet by Ebix india, towards growing their business.

Yet Ebixs total capital expenditures for 2010 was only $1.7 million, or only 1/3rd of the variancein Confirmnet related investment spending (~$5 million) between the India and US filings.

Raina completely avoided addressing our belief that the acquisition of Confirmnet (a San Diegobased corporation) required repatriation of cash, given that Ebix India financed the transaction.

Given all these facts, GCR believes:

Raina is not being truthful about the underlying cause of this variance. Ebix improperly avoided paying taxes on the Confirmnet acquisition, and avoided talking about

the tax implications to draw attention away from their tax liability.

Robin Raina Claims GCR is Comparing Apples and Oranges

Jeff Van Rhee asked Raina1: How about Confirmnet. You acquired Confirmnet and you quote a price in

your SEC-based documented as to what you paid for it, but in the Indian documents, financial statements,

he said you paid a different price. Hows the difference?

Robin Rainas answer: Jeff again, Were comparing apples and oranges here. In SEC filings

in the US, the disclosure accounts for the acquisition price paid to the Confirmnet shareholders for the

acquisition of Confirmnet, plus, additional payments to the former owners of Confirmnet in satisfaction

of achieved earnout obligations. That is in-line with all customary SEC filings made for material

acquisitions.

Whereas, the Indian statutory filings state, the total investment made by Ebix India, in Confirmnet to this

date, implying that the Indian filings state the sum total of the acquisition price paid to the Confirmnet

shareholders,plus any additional investments made in Confirmnet by Ebix India after the acquisition

date, in subsequent years, towards growing their business. This is in-line with local Indian filing

requirements as per IFRS and as per Foreign Exchange Regulation Act.


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Ebixs 2010 Total Capital Expenditures of $1.7 Million Contradict Rainas Confirmnet Claims

Between the US SEC filings and the India subsidiarys filings, Confirmnet-related spending is remarkably

similar for 2008 and 2009. It is only in 2010 that the amounts wildly differ (by $5.2 million, or nearly 10%

of Ebixs 2010 earnings2).

Raina claims the variance is explained by additional investments made in Confirmnet by Ebix India after

the acquisition date, in subsequent years, towards growing their business. Yet Ebixs total capex for

2010 is only $1.7 million, or less than 1/3rd of the variance3:

2008 and 2009 Confirmnet-related Spending Suggests Gotham is Comparing Apples and Apples

Raina claims that we are comparing apples and oranges yet 2008 and 2009s numbers are remarkably

similar, which suggests that Gotham is actually comparing apples to apples4:

Total Cost of Confirmnet Acquisition: the SEC Filings vs. the Indian Filings

2008 2009 2010

Investment in Confirmnet

SEC FILINGS (in 1,000s $) $7,294 $3,279 $2,975

INDIA FILINGS (in 1,000s $) $7,526 $3,310 $8,233

INDIA FILINGS (in 1,000s Rupees) 361,849 153,965 367,532

From India Balance Sheet

INDIA FILINGS (in 1,000s $) $7,237 $10,316 $17,667

INDIA FILINGS (in 1,000s Rupees) 361,849 515,814 883,346

Assume the INR USD is 0.0208, 0.0215, and 0.0224 for year end

2008, 2009, and 2010 respectively.


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Lies of Omission, Unimportant Facts, and the Unverifiable

When truth is replaced by silence, the silence is a lie. Yevgeny Yevtushenko

As convincing as Robin Raina may have sounded to some listeners, his explanations were inaccurate,

irrelevant, unimportant, and/or unverifiable. Rainas inaccurate and irrelevant claims have already been

thoroughly dissected in this report. Equally, if not more importantly however, Raina completely avoided

talking about the following matters (among other things):

Ebixs tax strategy is a sham (in fact or in substance), and was supported by transactions thatserved no other purpose but to avoid taxes.

The 2011 long-lived assets dont add. Ebixs internal controls have weakened even as Ebix hasgrown in size and complexity, as a result of its serial acquisitions.

The Robin Raina Foundations IRS filings are materially unreliable, inaccurate, and incomplete. Ebixs Board of Directors (and specifically its audit committee) is not based in the United States

nor are they qualified to do the job.

Instead of providing accurate answers with concrete details, Raina instead ignored the above-

mentioned and spent most of his time making false, irrelevant, and/or unimportant statements1:

As shown above, Raina spent nearly 75% of the call talking about irrelevant & unimportant matters:

Raina spent nearly 28% of the entire call (i) reciting accounting textbook definitions and (ii)pointing out our copy/paste error. He didnt explain why (i) unbilled receivables have been rising

faster than overall receivables, (ii) allowance for doubts is shrinking, and (iii) why the inclusion ofdeferred revenue within accounts receivable is justified, given how unusual it is.

Raina spent nearly 25% of the entire call describing his charitable activities, but did not deny noraddress that there are material accounting irregularities found in his Foundations IRS filings .

He spent 17% of his time describing an Australian loan, not the undisclosed Singapore loan.

Breakdown of the Conference Call by Topic

in minutes and % of time spent

Accounts receivable 8 27.6%

Robin Raina Foundation 7 24.1%

Australian Loan 5 17.2%

Jeff Van Rhee Intro 2 6.9%

Australian revenues 2 6.9%

Confirmnet 2 6.9%

Planetsoft cash repatriation 2 6.9%

2010 Long-lived assets 1 3.4%

TOTAL 29 100.0%


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Ebixs response via the Craig Hallum conference call comes with the following red flags:

The Craig Hallum conference call did not accommodate all listeners (many were rejected). Rainas responses were never issued in writing, nor were any supporting documents released. Ebix did not issue an 8K filing or press release, despite the materiality of the events. CFO Robert Kerris & the other members of management did not speak at all during the call.

Planetsoft: No Way to Verify Rainas Claims Without Indian + Singapore Filings

As this report clearly shows, Raina made many false statements and provided irrelevant information in

lieu of providing clarity and details. As a result, Rainas trustworthiness is questionable. This means that

his claims cannot be trusted on his words alone; rather, they must be verified by source documents.

We believe the following explanation regarding Planetsoft must be verified2:

No money was repatriated from the US for the purchase of Planetsoft. Planetsoft

owned two companies, one in the US and one in India. Planetsoft was primarily based in Indiawith 500 employees in India, and around 30+ employees in the US. Ebix India directly acquired

Planetsoft India through an asset purchase agreement called a business transfer agreement in

India. Ebix India directly acquired all the Planetsoft India assets and accordingly directly paid

Planetsoft India for the purchase. As is mandated by our agreement with the Singapore

governments economic development board, Ebix Singapore directly purchased the IP assets

from Planetsoft owners and paid directly for it. Ebix US purchased all the customer contracts and

customer relationship by directly paying Planetsoft owners for it. Ebix US funded its part of the

purchase by using its internal cash reserve and the bank credit line.

We need the following (at least) to verify his above claims:

Ebix Singapores 2011 and 2012 filings (Ebix Singapore has yet to file its 2011 filings). Ebix Indias 2011 & 2012 filings. Planetsofts financial statements, both of the parent and the Indian subsidiary.

Robin Raina Claim that the South Asia Times Misquoted Him is Dubious

The following is a direct excerpt from the South Asia Times3:

South Asia Times: How much you give to the foundation? What is its annual outlay?

Robin Raina: I hate to talk about it. But yes, a majority of the money that comes in for thefoundation comes from me. In a given year, RRF will typically spend about $2 million.

Rainas claim that he meant revenue does not pass the smell test, as it would suggest that not only was

his response misquoted, but that he misunderstood the clear and direct, two-part question that the

South Asia Times asked him. His claim is particularly dubious considering he never denies our more

serious concern (which technically has legal implications): the Robin Raina Foundations tax returns are

full of material accounting Irregularities.4


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EBIX All But Admits There is an On-going SEC Investigation

Ever since Bloomberg news first broke the story that there is an on-going SEC investigation, there has

been debate and controversy over whether there actually is an SEC investigation. The following

summarizes the publicly available claims:

November 5th 2012: Bloomberg news claims there is an SEC investigation, citing four people1. November 5th 2012: Ebix claims they are unaware of one and had not been advised of one2. February 21st 2013: The SEC investigation is on-going, according to Bloomberg news3. February 22nd 2013: CFO Robert Kerris says the company is not the subject of any investigation

related to statements in the Seeking Alpha article4.

Note the following:

Neither CFO Kerris nor anyone at Ebix currently denies there is an on-going SEC investigation. CFO Kerris statement does not claim there is no on-going SEC investigation, nor does it suggest

that Ebixs management is unaware of one.

No one other than CFO Kerris has recently commented on the alleged SEC investigation.

Memo to Ebix and Robin Raina: Is there, or isnt there, an SEC investigation, Led by the Enforcement

Division (not Corporate Finance) based out in Atlanta, Georgia? Investors deserve a clear answer.

November 5th 2012:

Ebix is being investigated

by the U.S. Securities and

Exchange Commission for

its accounting practices,four people with direct

knowledge of the probesaid.

November 5th 2012:

The Ebix senior

management team has notbeen advised of nor is it

aware of an any SECinvestigation regarding the

Companys previous filings.

February 22nd, 2013:

In November, Bloomberg

News reported that the SEC

had been investigating

Ebixs accounting practices.That investigation,

conducted by attorneys inthe SECs Atlanta office, is

continuing, said a person

who had been interviewedabout Ebix in recent weeks.

February 22nd , 2013:

Ebix CFO Robert Kerris Says

Company is Not the Subject

of Any Investigation Relatedto Statements in Seeking

Alpha Article.


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End Notes

Background

1. THE TRUTH ABOUT EBIX, ROBIN RAINA, AND THE ROBIN RAINA FOUNDATION , Gotham CityResearch, February 21st, 2013

2. Ebix press release, Ebix responds to Seeking Alpha blog, February 22nd, 20133. Ebix, Conference Call Hosted by Craig Hallum, February 26th 2013

http://www2.eintercall.com/moderator/presentation/Playback?id=d3ce21a7-a3e9-4e59-92fd-

98a83ce7eeab.rpm


Ebixs 2010 Singapore Long-lived Assets Still Dont Add


2. Ebix, Conference Call Hosted by Craig Hallum, February 26th 2013http://www2.eintercall.com/moderator/presentation/Playback?id=d3ce21a7-a3e9-4e59-92fd-

98a83ce7eeab.rpm

3. Ebix 2010 and 2011 10Ks4.

No Clarity on the Undisclosed Related Party Loan to Singapore

1. Ebix, Conference Call Hosted by Craig Hallum, February 26th 2013http://www2.eintercall.com/moderator/presentation/Playback?id=d3ce21a7-a3e9-4e59-92fd-98a83ce7eeab.rpm

2. Ebix Singapore PTE LTD Report of the Directors and Financial Statements for the financial yearended 31 December 2009, obtained via a Singapore contact via the ACRA website:

http://www.acra.gov.sg/

3. Ebix 2009 10K4. Ebix Australia (VIC) Pty Ltd, Annual Financial Report for the Financial Year Ended 2009, filed with

the ASIC http://www.asic.gov.au/

5. THE TRUTH ABOUT EBIX, ROBIN RAINA, AND THE ROBIN RAINA FOUNDATION , Gotham CityResearch, February 21st, 2013, and http://www.acra.gov.sg/


98a83ce7eeab.rpm


19/19

Page 19 of19

US and India Filings Contradict Rainas Confirmnet Explanation


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2. THE TRUTH ABOUT EBIX, ROBIN RAINA, AND THE ROBIN RAINA FOUNDATION , Gotham CityResearch, February 21st, 2013, and Ebix India subsidiarys filings

3. Ebix 2010 10K4. THE TRUTH ABOUT EBIX, ROBIN RAINA, AND THE ROBIN RAINA FOUNDATION , Gotham City

Research, February 21st, 2013, and Ebix India subsidiarys filings

Lies of Omission, Unimportant Facts, and the Unverifiable


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2. 3. The South Asian Times, Vol. 5 | No. 37 | January 5-11, 20134. THE TRUTH ABOUT EBIX, ROBIN RAINA, AND THE ROBIN RAINA FOUNDATION , Gotham City

Research, February 21st, 2013

EBIX All But Admits There is an On-going SEC Investigation

1. Greg Farrell, Bloomberg News, Ebix Accounting Practices Said to Be Probed by SEC, Nov 7, 2012http://www.bloomberg.com/news/2012-11-05/ebix-accounting-practices-said-to-be-probed-by-

sec.html

2.

Ebix press release, Ebix Responds to Bloomberg Article, Nov 5, 2012,http://www.ebix.com/pressrelease_text.aspx?artid=252

3. Greg Farrell, Bloomberg News, Ebix Drops After Report on Singapore Related-Party Loan,February 21, 2013 http://www.bloomberg.com/news/2013-02-21/ebix-drops-after-report-on-

singapore-related-party-loan.html

4. Charles Gross, Benzinga, Ebix CFO Robert Kerris Says Company is Not the Subject of AnyInvestigation Related to Statements in Seeking Alpha Article,

http://www.benzinga.com/news/13/02/3358247/ebix-cfo-robert-kerris-says-company-is-not-

the-subject-of-any-investigation-relat#ixzz2MJ0DI1Tv

2013 03 07 - Ebix All Distraction No Clarity - Final

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