the truth about ebix, robin raina, and the robin raina foundation

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

GOTHAM CITY RESEARCHGOTHAM CITY RESEARCHGOTHAM CITY RESEARCHGOTHAM CITY RESEARCH LLCLLCLLCLLC

THE TRUTH ABOUT EBIX,

ROBIN RAINA,

AND THE

ROBIN RAINA

FOUNDATION

"We're more Catholic than the Pope." –

(Former) co-Chairman Jo Lernout, of Lernout & Hauspie, September, 25 2000

"Ebix stands for integrity, in every form and fashion." –

CEO & Chairman Robin Raina, of Ebix, Inc., April 1, 2011

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Disclaimer:

By reading this report, you agree that use of GOTHAM CITY RESEARCH LLC’s research is at your own risk.

In no event will you hold GOTHAM CITY RESEARCH LLC or any affiliated party liable for any direct or

indirect trading losses caused by any information in this report. This report is not investment advice or a

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unless that person has agreed to be bound by these same terms of service.

You should assume that as of the publication date of this report, GOTHAM CITY RESEARCH LLC stands to

profit in the event the issuer’s stock declines. We may buy, sell, cover or otherwise change the form or

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Our research and report includes forward-looking statements, estimates, projections, and opinions

prepared with respect to, among other things, certain accounting, legal, and regulatory issues the issuer

faces and the potential impact of those issues on its future business, financial condition and results of

operations, as well as more generally, the issuer’s anticipated operating performance, access to capital

markets, market conditions, assets and liabilities. Such statements, estimates, projections and opinions

may prove to be substantially inaccurate and are inherently subject to significant risks and uncertainties

beyond GOTHAM CITY RESEARCH LLC’s control.

Our research and report expresses our opinions, which we have based upon generally available

information, field research, inferences and deductions through our due diligence and analytical

process. GOTHAM CITY RESEARCH LLC believes all information contained herein is accurate and

reliable, and has been obtained from public sources we believe to be accurate and reliable.

However, such information is presented “as is,” without warranty of any kind, whether express or

implied. GOTHAM CITY RESEARCH LLC, makes no representation, express or implied, as to the accuracy,

timeliness, or completeness of any such information or with regard to the results to be obtained from its

use. All expressions of opinion are subject to change without notice, and GOTHAM CITY RESEARCH LLC

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contained in them.

GOTHAM CITY RESEARCH LLC has filed as a whistleblower with the Internal Revenue Service and the

Securities Exchange Commission.

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Table of Contents

I. Disclaimer

II. Summary

III. Introduction

IV. Ebix’s Accounting: Unreliable, Inaccurate, and Incomplete

V. The Tax Strategy: Sham in Fact or Sham in Substance

VI. Ebix’s Stock Deserves to be Halted

VII. Shares are Worth No More Than $5

VIII. Robin Raina Foundation: a Crumbling Wall of False Integrity

IX. End Notes

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GOTHAM GOTHAM GOTHAM GOTHAM CITY RESEARCHCITY RESEARCHCITY RESEARCHCITY RESEARCH LLCLLCLLCLLC

a

SUMMARY OF FACTS

• There is a $66 million undisclosed related party loan

between Ebix Singapore and an unnamed related party.

• Australian revenues are only 32% of the amounts stated in

the SEC filings, according to Australian filings.

• 2010 Singapore intangible assets are misstated by $67

million. 2011 long-lived assets do not add up.

• The 2010 & 2011 10K filings were filed before the

Singapore 2010 financial statements were signed off.

• The Confirmnet acquisition cost 30% more according to

the India filings than it did according to the SEC filings.

• Ebix could not have paid for Planetsoft, without moving

cash from India, unless the cash never left the US.

• Less than 5% of Singapore’s intangible assets are IP-

related, i.e. most of the assets lack economic substance.

• EZ-Data’s IP was transferred to Singapore yet Raina says

“No US IP has been transferred to any other country.”

• Ebix’s Singapore and India subsidiaries’ financial

statements for 2011 remain unavailable.

• Core business is declining, tax rate is rising, and goodwill

write-offs and debt maturities are looming.

• The Robin Raina Foundation’s IRS filings are full of material

accounting irregularities.

• Raina misrepresented his foundation’s spending by 300+%.

GOTHAM CITY RESEARCH’S OPINIONS

• Ebix will restate historical results – likely significantly – as a

result of the issues covered in this report & elsewhere.

• Ebix stock should be halted until the financial statements

are reliable, accurate, and complete.

• Cherry Bekaert Holland should not sign off on Ebix’s 2012

financials, without Ebix Singapore’s 2011 and 2012 filings.

• Ebix’s stated tax strategy is supported by sham in fact

and/or sham in substance transactions.

• Ebix shares are worth no more than $5.00/share, &

approach $0.00 as the IRS, debt, & other risks unfold.

Company: EBIX

Ticker: EBIX

Share price: $18.34

Market cap: $711M

Enterprise value: $764M

52-week high: $26.28

52-week low: $15.26

Shares outstanding:

37.28M

Float: 34.86M

Avg. Daily Vol: 447K

% float short (1/15):

42.2%

TTM Revenue: $189M

TTM Net income: $69M

2012 YTD FCF: -$5M

Net debt: -$53M

Tangible book: -$67M

Dividend yield: 2%

FYE: Dec. 31

Auditor: Cherry Bekaert

Holland

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INTRODUCTION

GOTHAM CITY RESEARCH first heard about Ebix last October, when we saw an Ebix-related lawsuit hit

our inboxes. These kinds of lawsuits are normally thrown out in federal court, but this one did not get

thrown out. Our interest in the Ebix story increased as we read through the complaint.

Given the alarming accusations in the lawsuit, we soon decided to investigate for ourselves, and take a

fresh look into the company. We read over 10,000 pages of documents from Sweden, Singapore, India,

Australia, New Zealand, & the United States pertaining to the company. We consulted with professionals

from the disciplines of forensic accounting, law, transfer pricing, background investigations, finance, and

software. We found assets not adding, cash disappearing, and management misrepresenting. The more

we looked, the more we found reality to be far worse than the prior critics had made it out to be.

For example, we discovered a $66 million undisclosed related party loan1, $67 million accounting

irregularity in long-lived assets2, and Australian revenues at a fraction of what the SEC filings disclosed,

per the Australian filings3. We concluded that (i) Ebix’s financial statements are unreliable, inaccurate,

and incomplete, (ii) their tax strategy is a sham, and (iii) the stock should be halted.

We decided it was important to go public with our findings after we found out that Robin Raina’s

misrepresentations did not end with Ebix. For starters, he recently exaggerated to the South Asia Times

(who named him man of the year) how much Robin Raina Foundation (“RRF”) typically gives every year4:

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 the

foundation comes from me. In a given year, RRF will typically spend about $2 million.

In fact, RRF has spent at most $3.7 million combined since inception, as the IRS Form 990s reveal5:

Raina’s bogus claims to the South Asia Times are morally reprehensible, but not illegal. We do wonder,

though, about his declarations that RRF’s form 990s are “true, correct, and complete”, made under

penalties of perjury.6 As it turns out, there are, in fact, accounting irregularities found in the Robin

Raina Foundation’s form 990s, as we discuss later in this report.

As Autonomy, Lernout & Hauspie, AremisSoft, Network Associates, and other epic software frauds

remind us: when you put together a bunch of bushes, you don’t get a tree – you get a bunch of scraggly,

old bushes. We believe Ebix is no different, having grown largely due to its improper tax strategy, luck,

dodgy acquisitions, and Raina’s ability to fool some of the people, all of the time. We believe that the

chickens are about to come home to roost for Ebix and Raina.

“Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence,

and energy. And if you don’t have the first, the other two will kill you”. – Warren Buffett

thousands $ 2004 2005 2006 2007 2008 2009 2010 2011 TOTAL

Total expenses ($56) ($326) ($598) ($441) ($471) ($704) ($1,054) ($86) ($3,735)

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Ebix’s Accounting: Unreliable, Inaccurate, and Incomplete

What Ebix and CEO Robin Raina Have Said Regarding the Integrity of the Company and its Filings

On April 1st, 2011 (April Fool’s Day), a week after a negative report was published on Seeking Alpha1,

CEO Robin Raina hosted an Investor Conference. The below slide is from said conference2:

On November 5th, 2012, a Bloomberg story titled Ebix Accounting Practices Said to Be Probed by SEC3

claimed that Ebix “is being investigated by the U.S. Securities and Exchange Commission for its

accounting practices, four people with direct knowledge of the probe said.”

Ebix swiftly issued a press release4, in which Robin Raina, Chairman, CEO and President of Ebix, said:

“We stand behind the accuracy of our public filings.“

Is Robin Raina, Chairman, CEO and President of Ebix telling the Truth, the Whole Truth, and Nothing

But the Truth?

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Gotham City Research Believes Ebix’s Financial Statements are Unreliable, Inaccurate, & Incomplete

We believe Ebix’s financial statements are unreliable, inaccurate, and incomplete and that the company

will have to restate historical results for the following reasons:

I. Undisclosed Related Party Transactions and Assets That Don’t Add

• There is a $66 million undisclosed related party loan between Ebix Singapore and an unnamed

related company.

• Ebix’s 2010 long-lived assets don’t add up. The Singapore irregularity alone is $67 million. That’s

equal to 94% of Ebix’s 2011 GAAP net income and just under 10% of the company’s market cap.

• 2011 long-lived assets on the balance sheet do not add up to the long-lived assets in note 16.

• The total cost of Confirmnet is off by 30+% between the Indian filings and SEC filings.

II. Evidence that Reported Revenues and Accounts Receivable are Not Accurate or Reliable

• Ebix’s Australia revenues, as disclosed in ASIC filings, are only a fraction of what SEC filings show.

• 20%-40% of accounts receivable seem of dubious quality, given the growth in unbilled

receivables and odd inclusion of deferred revenue within accounts receivable.

• Ex-employees have raised doubts on the accuracy and reliability of Ebix’s account receivables.

III. Other Critics have Voiced an Entirely Different set of Concerns about Ebix’s Reported Figures:

• Organic growth misrepresentation5 – Ebix's most recent 10Q (Q3'12) implies they

misrepresented organic growth in the 10Q's filed for Q1'12 and Q2'12, and organic growth has

gone negative. Past organic growth (prior to 2012) rates are suspect, likely misrepresented as

well – Raina says that 11 percentage points of last year's revenue growth were organic.

• Weak, non-existent, & inadequate internal controls – Ebix has had 4 auditors in the last 8 years,

and “As Ebix has gotten larger, its audit firms have gotten smaller.”6

While the concerns we’ve identified are the most serious to date, the combination of what we’ve

uncovered and what’s already out there leave us with no doubt that Ebix’s financial statements are not

accurate, reliable, or complete.

Once revenues are suspect, everything else in the income statement is suspect, as every line-item flows

through the P&L. Small changes in reported revenue have an amplified effect on EPS (the exact

multiplier depending on financial and operating leverage).

And once a company is not disclosing a material related party loan (in an amount roughly equal to Ebix’s

2009 and 2010 tangible assets), who knows what else they’re hiding?

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The $65.8 Million Undisclosed Related Party Loan between Ebix Singapore and a Related Party

One of the biggest concerns that some market participants have voiced is that they just can’t seem to

get around trusting Ebix. Others, such as Jeff Van Rhee of Craig Hallum, seem to trust (without verifying)

Robin Raina’s claims and Ebix’s financial statements.7

We believe that it is actually much worse than even the skeptics think: for starters, the company has

never disclosed a $65.8 million loan between its Singapore subsidiary and an undisclosed related party.

From the Singapore filings8:

The loan to Singapore is outstanding as of the 2010 financial statements. We don’t know of its status

beyond 2010 as Ebix has yet to even file its 2011 filings9, as of the writing of this report. Both the 2009

and 2010 filings indicate that the loan “is not expected to be repaid within the next 12 months”:

It would seem that the loan is, by definition, a loan of indefinite duration. A loan with such lax terms

does not seem remotely consistent with an arm’s length transaction (more on this later).

The Singapore financial statements make it very clear that Ebix Singapore purchased intangible assets

with the proceeds from said loan, as shown in the statement of cash flows:

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Strangely, Ebix’s Australian filings Do Not Reflect any Corresponding Inflow or Outflow of Cash

The following footnote reveals that most of the intangible assets were purchased from Telstra

(subsidiary of Ebix Australia):

So where did the money flow? The Singapore filings imply it flowed to Australia. The Australian filings,

then, should reflect the sale of intangible assets to Singapore10:

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The ‘Investments’ account clearly reflects a major decline (of just under 50 million aussie dollars). That

looks about right, and appears to correspond to the sale of intangible assets to Singapore.

Where things get very strange: there is no corresponding increase in cash on the balance sheet; equally

disturbing is that the decline in the ‘investments’ account is not reflected at all in the statement of cash

flows:

The liabilities section of the balance sheet shows an account with a similar decline in the same period:

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Specifically, there is a decline in ‘Trade and Other Payables’ in an amount that seems on the same order

of magnitude as the decline in investments account. The specific sub line-item is called ‘amounts

payable to related parties’. Mathematically, the decline in the investment account mirrors the decline in

amounts payable to related entities. They appear to cancel each other out to balance the balance sheet.

Here’s the problem: neither the decline in the investments account (as mentioned), nor the decline in

payables is found in the statement of cash flows. Nor is there a footnote that explains these declines.

Gotham City Research believes in three possible explanations (and none of them bode well for Ebix):

1. The undisclosed related party loan and (corresponding IP purchase transactions) are “sham in

fact” transactions, i.e. they never actually occurred;

2. Ebix Singapore did receive said loan from an undisclosed related party, but the money is

unaccounted for;

3. Ebix Singapore did receive said loan from an undisclosed related party, and sent proceeds off to

some completely unmentioned entity, let’s call party X, who then forgave the Ebix Australia’s

payables.

In either 3 scenarios, the simple question is “why”? We can’t think of any good reasons, but we can

think of plenty bad reasons.

The best case scenario we can think of is scenario number 3. But in that case, the (I) absence of any

disclosures to US investors, (II) lack of any disclosures regarding this hypothetical ‘party X’ in the

Singapore filings, and (III) no inflow of cash or explanation in the footnotes of Australian filings lead us to

believe that these lies of omission were motivated by some (economically) rational reason: namely, to

improperly minimize taxes. For more, see the tax section.

Ebix’s Australian Revenues and Profits are only a Fraction of What SEC filings Show, per ASIC filings

We examined the financial statements of Ebix Australia (VIC) Pty Ltd, made available by the Australian

Securities and Investment Commission (“ASIC”) & found that Ebix’s revenues & pre-tax profits, according

to the ASIC filings, are only a tiny fraction of what’s stated in Ebix’s SEC 10Ks11:

SEC vs. ASIC FILINGS - 2011 Financial Statements

thousands $ SEC ASIC VARIANCE

Cash $7,605 $8,467 -10.2%

Long-lived assets $1,286 $1,040 23.7%

Revenue $31,991 $10,161 214.8%

pre-tax income $2,734 $1,127 142.6%

Notes:

Cash for Australia from the SEC filings is as of

3/12/2012, not 12/31/2012, for unknown reasons.

I assume for simplifying purposes 1 Aussie dollar

equals 1 US dollar. US AUD in fact did vary around

1:1 in 2011, so it's a reasonable assumption.

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The revenue and pre-tax income irregularities are particularly odd given that the long-lived assets, cash

balances, and employee count look far more similar, between the SEC and ASIC filings.

For example the 2011 Australian filing claims 74 employees (they mysteriously did not fill out and reveal

employee count in the 2010 ASIC filing), while the 10K 2010 claims 77 employees (Ebix stopped

reporting employees by geographic segment in 2011 10K).12

Also, while Ebix does disclose having 3 total subsidiaries in Australia, Ebix Australia Pty,. Ltd., Ebix

Australia (VIC) Pty. Ltd., and Ebix Exchange-Australia PTY LTD, Ebix Australia (VIC) Pty Ltd’s financial

statements clearly show that it fully owns Ebix Australia Pty,. Ltd. and Ebix Exchange-Australia PTY LTD:

Recall, Australia is the only country where Ebix has any significant revenues outside of the US:

Ex-employee Statements and the Composition + Quality of Accounts Receivables Cast Doubt on the

Reliability and Accuracy of Ebix’s Reported Revenues

Ex-employees have questioned the reliability and accuracy of Ebix’s receivables13:

• “Unable to determine which customers had made payment for which projects.”‖

• “A former Ebix account manager, who had worked for E-Z Data prior to the acquisition

and continued to work for Ebix until early 2011, confirmed declining growth.”

• “As of last quarter, our accounts receivable area became a major concern to senior

management and to our stockholders.”

• “A former senior executive of Connective Technologies, Inc., confirmed not only the

experience of Peak with respect to Ebix‘s inability to provide accurate financials on

which to base his earn out…”

• "Constant errors" in "billing and administrative processes" left Ebix's employees "unable

to properly produce invoices to customers in a timely manner."

• "Ebix's accounting procedures were plagued by errors. Ebix was consistently unable to

properly bill customers, tie customer payments to invoices issued by Ebix…provide basic

financial data, or calculate Peak's revenue."

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• "As a result of the significant billing problems caused by Ebix, Peak did not properly

allocate sales and revenue into the appropriate accounting periods. As a result, upon

information and belief Peak overstated its accounts receivable."

• "Ebix was consistently unable to tie customer payments to specific invoices. As a result

of Ebix's failure to account for customer payments, Ebix was unable to manage accounts

receivable for Peak, & Ebix is unable to create & maintain accurate books and records."

20%-40% of Accounts Receivables Seem of Dubious Quality, per Close Examination of the SEC filings

GOTHAM CITY RESEARCH believes at least 20-40% accounts receivables are of dubious quality. We

believe Ebix is utilizing a toxic combination of aggressive accounting – rising unbilled receivables, a

shrinking reserve for doubtful accounts, and unusual inclusion of deferred revenue within receivables.

Unbilled Receivables

Unbilled receivables have been used as a classic financial shenanigan to aggressively recognize revenue,

especially when its growth has outpaced overall A/R growth and revenue growth14. Ironically (or

perhaps not), Ebix’s auditor authored a white paper on unearned receivables15. The below table shows

how unbilled receivables growth outpaced total receivables growth recently16:

Despite all the issues that employees have identified regarding Ebix’s receivables, allowance for doubt

accounts has actually been trending down, as a percentage of receivables, even as unbilled receivables

as a percentage of receivables has been rising.

Deferred Revenue as a Component of Accounts Receivable

Ebix started including deferred revenue into its accounts receivable account (even though it reports a

separate deferred revenue account as a liability) as soon as Cherry Bekaert Holland became its auditor in

Unbilled Receivables Growth Outpaced Total Accounts Receivables Growth

thousands $s 2011 Q4 2012 Q1 2012 Q2 2012 Q3

Revenue $44,050 $43,827 $47,716 $53,804

Gross accounts receivable $32,852 $30,572 $34,291 $38,519

Unbilled receivables $5,200 $6,100 $7,700 $9,100

Revenue % growth (0.5%) 8.9% 12.8%

Gross accounts receivable % growth (6.9%) 12.2% 12.3%

Unbilled receivables % growth 17.3% 26.2% 18.2%

Allowance for Doubtful Accounts is Trending Down, even as Unbilled Receivables Trends Up

thousands $s 2011 Q4 2012 Q1 2012 Q2 2012 Q3

Gross accounts receivable $32,852 $30,572 $34,291 $38,519

Allowance for doubtful accounts $1,719 $1,221 $1,195 $1,316

Allowance for doubtful accounts as % of A/R 3.9% 2.8% 2.5% 2.4%

Unbilled receivables as % of A/R 15.8% 20.0% 22.5% 23.6%

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200817. The amount of deferred revenue Ebix includes within accounts receivable is buried in the notes,

making it difficult for most investors who don’t read the notes. The below table shows how the deferred

revenue included within accounts receivable has grown at a faster clip than accounts receivable:

The inclusion of deferred revenue within the accounts receivable account is exceedingly rare, based on

our experience.

Rather than relying on our judgment, however, we consulted a few accounting experts, who have been

studying these issues for decades. We asked Dr. Edward Ketz, Professor of Accounting at Penn State

University, and author of Hidden Financial Risk and Accounting Ethics: “Have you ever seen a company

include a portion of their deferred revenue in accounts receivable?”

He said18:

“Never. Deferred revenue means you have received cash but have not provided the product or

the service to the customer, so you recognize the liability—the fact that you owe them a product

or a service.

If you have a receivable instead, I think this falls into the category of executory contracts. The

customer is promising to pay you and you are promising them something in exchange. The

profession has a bias against recognizing such mutual promises, as the profession seems not to

recognize most executory contracts.”

According to another accounting expert we spoke with, he stated that it is exceedingly rare and unusual

for a company to include deferred revenue in A/R. He added that it does occur in cases where a

company nets it out of accounts receivable. However, the same accounting expert said he’s never seen

deferred revenue included within accounts receivable in the event there is a separate deferred revenue

account (which Ebix has).

Based on our independent research, the evidence seems to support Professor Ketz and the other expert

we spoke to: we found less than 5 cases where deferred revenue is included within accounts receivable;

in most of the cases, it was netted out due to an absence of a deferred revenue account.

Deferred Revenue Included Within A/R Has Grown Faster than Total A/R

thousands $s 2011 Q4 2012 Q1 2012 Q2 2012 Q3

Revenue $44,050 $43,827 $47,716 $53,804

Deferred Revenue $16,460 $16,211 $18,060 $17,845

Deferred rev included in A/R $5,200 $6,100 $7,700 $9,100

Revenue % growth (0.5%) 8.9% 12.8%

Deferred Revenue % growth (1.5%) 11.4% (1.2%)

Deferred rev included in A/R % growth 17.3% 26.2% 18.2%

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Ebix’s 2010 Long-Lived Assets Don’t Add Up. The Singapore Irregularity Alone is $67 Million (94% of

GAAP 2011 Net Income and Just Under 10% of the Market Cap)

Contrary to Mr. Raina’s claims suggesting that all Ebix’s public filings are accurate, we subsequently

found material irregularities in the reporting of 2010’s long-lived assets. The irregularity in the Singapore

long-lived assets alone is $67 million, which is roughly equal to Ebix’s entire 2011 GAAP earnings. The

table below shows the irregularities, that is the 2010's long-lived assets as reported in the 2010 10K vs

2011 10K19:

We highly doubt that these accounting irregularities were made by accident; Ebix has had plenty of time,

and has filed 5 amended 10Ks just in the last 2 years. In fact, none of the amended 10Ks correct these

irregularities, nor has there been an amended filing been released for 2010’s 10K. If they wanted to get

this right, we believe they would’ve done so by now, especially given all the extra public scrutiny the

company has received in the last 2 years.

Three Different Numbers for the 2010 Singapore Long-Lived Assets

A superficial examination of the 2011 10K would lead many to believe that Ebix and/or Cherry Bekaert

Holland corrected the 2010 long-lived asset numbers in the 2011 10K. We believe the 2010 long-lived

assets numbers from both the 2010 and 2011 10Ks remain unreliable and inaccurate, for the simple

reason that the 2010 Singapore long-lived assets number does not agree with the figures provided in the

2010 and 2011 10Ks20:

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

thousands $ 2010 10K 2011 10K VARIANCE

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 lieu 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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No matter which exchange rates you use to convert from USD to SGD and visa versa (within the range

that the SGD USD actually traded in 2010), the 2010 Singapore long-lived assets number reported in the

2011 10K does not equal that found in the Singapore 2010 filings.

We believe these irregularities point to a much more serious problem: Ebix’s reported financials are

unreliable and inaccurate. If the goodwill and intangible assets are materially unreliable, then Ebix’s

profits by segment are materially unreliable, as they directly impact amortization expense, which

materially and directly impact segment profits.

If the Singapore intangible Asset Numbers are Suspect, so is the Alleged Singapore Tax Scheme

The company claims21:

The Company also has a relatively low income tax rate is in Singapore in which our operations

are taxed at a 10% marginal tax rate as a result of concessions granted by the local Singapore

Economic Development Board for the benefit of in-country intellectual property owners.

The irregularities shown above cast a shadow over Ebix’s stated tax strategy in Singapore. After all, if

there are three different numbers for the 2010 Singapore long-lived assets (and most of the long-lived

assets are intangible assets), is not the stated tax strategy suspect as well? The basis of said tax scheme

is intellectual property (which is included in the intangible assets), according to Ebix.

As we discuss in greater depth, it turns out this is only the tip of the iceberg, as there are bigger

problems with Ebix’s claimed tax strategy.

2011 Long-lived Assets on the Balance Sheet Show One Number, while Note 16 Shows Another

After uncovering the 2010 long-lived asset irregularities discussed, we then looked to verify and cross

check the long-lived asset figures disclosed in note 16 (of the 2010 and 2011 10Ks) to the long-lived

asset figures that could be derived from the consolidated balance sheet.

The 2010 Singapore Long-Lived Assets from 3 Sources

2010 10K 2011 10KSingapore

Filing

In US Dollars $134,993 $67,781 $77,407

In Singapore Dollars $173,379 $87,055 $99,418

The Singapore Dollar (SGD) to US Dollar on 12/31/2010

= 0.7786. The low for the SGD USD in 2010 was 0.7028,

which means currency does not explain the variance

between the 2010 long-lived asset # from the 2011 10K

and the 2010 Singapore financial statements.

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We found that 2011’s long-lived assets as calculated from the consolidated balance sheet do not equal

the total long-lived assets number found in note 16. The 2010 numbers add up; 2011’s do not as shown

below22:

No matter how we calculate long-lived assets, either (I) subtracting current assets from total assets or (II)

adding up the long-lived assets one by one, neither calculation equals long-lived assets found in note 16.

In our experience studying and uncovering some of the great accounting-related frauds in the last 20

years, one common characteristic many have shared: basic, straight-forward numbers that should add

up, don’t. Even if these specific discrepancies are small in isolation, they are indicative of much bigger

problems.

How much did Ebix pay for Confirmnet (including earnouts)? The Ebix India filings Say One Thing, the

SEC Filings Another

Ebix’s Indian subsidiary’s filings and SEC filings tell the same story as far as how much was paid for

Confirmnet (including earnouts) in 2008 and 2009. In 2010, however, they do not. They differ by at least

$5 million, as shown in the below table23:

Gotham City Research is not sure which numbers are correct. Either the 10Ks are correct, the India

filings are correct, or neither are correct. Just like the Singapore long-lived assets, however, the clear

implication here is that the Ebix financial statements are not reliable, accurate, or complete.

Long-lived assets from the 2011 10K

thousands $ 2010 2011

From Note 16 $242,518 $346,287

Derived from Balance Sheet $242,518 $347,365

Variance $0 ($1,078)

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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Ebix Taxes: Sham in Fact or Sham in Substance

What Ebix and CEO Robin Raina Have Said Regarding Alleged Ebix’s Tax Strategies

Robin Raina says that Ernst & Young International has ensured that Ebix follows India's regulations in its

transfer payments. "The government has given a pretty good tax rate to us," says Raina. "We are not

running a tax shelter."1

He has also said “No US IP has been transferred to any other country” as shown below2:

Gotham City Research does not trust the company’s account of its tax strategy. We believe it is a sham

in fact, if not in substance for the following reasons:

• The $66 million undisclosed related party loan seems to serve no purpose other than to reduce

taxes; the loan seems to violate the arms-length principle, in nearly every way possible.

• The purchase/transfer of IP assets from Australia/US to Singapore financed with the proceeds

from the undisclosed loan doesn’t seem to serve any economic role other than tax minimization.

• Intellectual property is a very small percentage of Singapore’s intangible assets. Nearly 90% of

the intangible assets purchased were Goodwill and Contractual/Territorial Relationships.

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Ebix’s flow of cash, profits, composition of assets, and certain operational details don’t agree with

Ebix’s explanations of its tax strategies.

• Singapore’s balance sheet contained no intangible assets prior to 2009, which is not supportive

of Raina’s claims that Singapore had IP structures in place “many years back”

• Singapore’s director wears way too many hats, some which seem of a conflicting nature.

• Ebix India’s cash declined by $11 million between 5/7/2012 and 8/7/2012, with no explanation.

• Confirmnet acquisition was financed by an Indian subsidiary, which seems a taxable event.

• We estimate Ebix must have repatriated cash from India to the US to pay for its Planetsoft

Acquisition. Or the cash never left the US.

• Interest income on cash seems low for a company that should be swimming in cash offshore.

• E-Z Data, wholly owned subsidiary of Ebix, transferred US intellectual property to Ebix Singapore,

contrary to Raina’s claim “No US IP has been transferred to any other country.”

We believe Raina and Ebix were motivated by the desire to minimize taxes, fund acquisitions with funds

that otherwise belong to taxpayers, support the stock via dividends and stock buybacks with funds that

otherwise belong to taxpayers, and self-enrichment.

Ebix’s taxes looked suspicious even before we uncovered the above stated facts. Specifically3:

• Ebix had the lowest effective tax rate of its peers in 9 of the last 10 years.

• Ebix’s tax rates in 2009 and 2010 were 3% and 1% respectively, even as CRM, IBM, AAPL, GOOG,

and MSFT tax rates were between 21%-41% in the same period.

• Ebix’s geographic allocation of pre-tax profits over 2008-2011 appears at odds with geographic

location of its assets and the sourcing of its revenues.

• Revenue vs. profits vs. PP&E disparity could draw scrutiny from IRS.

• Uncertain tax reserve seems exceptionally low, at 1.6% of total pretax income (in last 4 years), is

one of lowest of companies analyzed. IRS has not received years 2007-2011; if unfavorable

review, may not have sufficient reserve to offset the assessment.

• Aspects of Ebix's tax provision do not conform to GAAP. Since 2002, Ebix has provisioned $5

million in GAAP taxes in total, despite being profitable from a GAAP perspective each quarter.

Source: http://www.sabrientsystems.com/files/pdf/Effective-Tax-Rates.pdf

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The Singapore Undisclosed Related Party Loan and the Arm’s Length Principle

The arm’s length principle, despite its informal sounding name, is found in Article 9 of the OECD Model

Tax Convention and is the framework for bilateral treaties between OECD countries, and many non-

OECD governments, too. Article 9 states4:

[Where] conditions are made or imposed between the two [associated] enterprises in their

commercial or financial relations which differ from those which would be made between

independent enterprises, then any profits which would, but for those conditions, have accrued to

one of the enterprises, but, by reason of those conditions, have not so accrued, may be included

in the profits of that enterprise and taxed accordingly.

Said differently, a transfer price should be the same as if the two companies involved were indeed two

independents, not part of the same corporate structure.

According to the Singapore Inland Revenue Authority of Singapore (“IRAS”), to determine the arm’s

length interest rate, some factors to consider include5:

• the nature and purpose of the loan,

• market conditions at the time the loan was granted,

• the principal amount,

• tenure and terms of the loan, etc.

We believe the undisclosed related party loan between clearly violates the “arm’s length principle” for

the following reasons:

1. No independent party would ever have made such a loan of this size, and with such absurd loan

to value, interest coverage, and other debt ratios. An underwriter would simply reject such a

loan request. As a result, there would be no loan, and no market clearing interest rate.

2. No independent party would lend on such lax and fuzzy terms, i.e. an indefinite term loan.

3. Market conditions in 2009 only add to our beliefs stated in 1. And 2.

4. The purpose of the loan was to acquire intangible assets; we believe the intangibles assets were

transferred for little to no reason other than to avoid US and Australian taxes.

No Independent Party Would Approve the Singapore Loan

This loan not only lacks precedent transactions, but its absurdly uneconomic nature is not consistent

with an “arms length” transaction: The interest coverage and loan to asset ratios are quite comical6:

Undisclosed Related Party Singapore Loan: Debt Ratios

thousands SGDs 2006 2007 2008 2009

Revenue $3,715 $2,785 $2,695 $2,721

Profit before tax $832 $268 ($338) $1,496

Total Assets $4,277 $5,068 $4,398 $17,822

Loan to revenue 23.3x 31.1x 32.1x 31.8x

Interest coverage 0.11x 0.03x -0.04x 0.19x

Loan to assets 20.23x 17.07x 19.67x 4.85x

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No independent Party Would Lend to Ebix Singapore PTE LTD on Such Lax and Ambiguous Terms

Ebix Singapore PTE LTD’s 2009 & 2010 filings provide little information regarding the terms of the loan:

We deduce that “is not expected to be repaid with the next twelve months” indicates that the loan has

no clear maturity date, as the 2009 and 2010 contain the same language. That is, this is a loan of

indefinite duration. Based on precedent transactions and underwriting standards, the terms are not

consistent with an arms-length transaction.

A Closer look at the Singapore Operations

Raina claims, “Our world-wide development and IP structure was established in these places many years

back as a globalization need.”7

The facts with respect to Singapore suggest otherwise, as Singapore had no intellectual property on its

balance sheet in 20088:

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Singapore only had 6-11 employees prior to its purchase of intangible assets from Australia/US9:

Ebix Singapore’s Director, John Graham Prior, seems to wear way too many hats, as he is10:

• Ebix Singapore’s 1 of 2 Directors (who signed off on the last two financial statements)

• Corporate Senior Vice President of International Business and Intellectual Property

• Primary point of contact for all inquiries

• And primary sales contact

Legitimate businesses separate the sales function from the accounting/audit function. But in the case of

Ebix, the same person who signs off on the audited financial statements is also the primary sales contact,

and the primary contact for general inquiries. That seems improper, and indicative of negligible

infrastructure.

So in short, the facts don’t support Robin Raina’s claim that, “Our world-wide development and IP

structure was established in these places many years back as a globalization need.”11

In fact, all the above mentioned facts suggest Ebix only modified Singapore’s organizational structure in

order to reap the rewards of the favorable tax structure (contrary to Raina’s claim otherwise).

Over 95% of Singapore’s Intangible Assets Have Nothing to Do with Intellectual Property

Robin Raina would have you believe that Ebix is swimming in intellectual property, and that Singapore is

some mecca of intellectual property. So let’s look at what the numbers say12:

Employee Count

2008 2009 2010

Americas 308 412 533

Australia 63 66 77

Zealand 9 9 12

India 251 460 530

Singapore 6 11 27

Total 637 958 1179

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As more clearly shown below, most of Ebix’s intangible assets are unrelated to IP assets:

We will go a step further: goodwill and contractual/territorial relationship are largely worthless, if they

were marked to market, as Ebix is a roll-up, with declining organic growth. It seems that Ebix Singapore

bought ‘goodwill’ and ‘contractual/territorial relationships’ from Australia (possibly the US), for reasons

we cannot fathom.

The only reason we can come up with are : (1) Ebix wanted to give off the appearance that it owns a

large amount of IP (hoping no one would look at the footnotes, and discover the truth) (2) and fool the

Singapore government into approving a low tax rate.

We don’t see how the paper ownership of paper assets that have little value beyond the paper it’s

written on, somehow magically enables Ebix to avoid US taxes. Recall that we have three different

numbers for 2010’s Singapore intangible assets, as we discussed earlier. All in all, it all seems way too

good to be true. Our belief is that these funny looking transactions serve little to no purpose other than

to minimize taxes for Ebix, inc.

Ebix India’s Cash Declined by $11 Million Between 5/7/2012 and 8/7/2012, With No Explanation

One of the tell-tale signs of transfer pricing schemes run by some of the more well known companies –

such as Apple, Google, etc. – is that foreign profits in favorable tax regimes remain offshore, not just on

paper. The precise reason transfer pricing has gotten so much attention is that in the event these funds

are repatriated back onshore, these companies have to pay taxes on them (follow the recent Dell

headlines, for example)13.

Singapore Intangible Assets - Breakdown by Type

thousands of Singapore $s 2008 2009 2010

Goodwill $0 $53,551 $52,060

Contractual/Territorial Relationships $0 $21,053 $21,053

Intellectual Property rights $0 $3,897 $3,897

Developed technologies $0 $638 $874

Trademarks $0 $225 $225

Customer relationships $0 $3,584 $4,884

Database $0 $0 $268

TOTAL INTANGIBLE ASSETS, GROSS $0 $82,947 $83,261

Singapore Intangible Assets - % Breakdown by Type

2008 2009 2010

Goodwill 0.0% 64.6% 62.5%

Contractual/Territorial Relationships 0.0% 25.4% 25.3%

Intellectual Property rights 0.0% 4.7% 4.7%

Developed technologies 0.0% 0.8% 1.0%

Trademarks 0.0% 0.3% 0.3%

Customer relationships 0.0% 4.3% 5.9%

Database 0.0% 0.0% 0.3%

TOTAL 0.0% 100.0% 100.0%

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So how is it that Ebix can use or move $11 million of cash (cash by geographic segment shown below)

from India with no explanation, between May 7, 2012 and August 7, 2012?14

It would seem that the $11 million was either used in India or used elsewhere. It does not appear to

have been transferred over to another region, as 8/7/2012 total cash shows a meaningful decline.

The $11 Million Not Used Within India

India’s long-lived assets actually declined in India between 3/30/2012 and 9/30/2012 (long-lived assets

by geographic segment shown below), despite announcing “Ebix Purchases Two New Buildings in India,

to Build a Office Campus Over 4000 Square Meters” on 8/27/1215:

Ebix was Highly Acquisitive in 2012, perhaps that’s where the $11 Million Ended Up

Acquisitions16

• $34 mm Planetsoft 6/5/2012 – Aliso Viejo, CA based , as further explained below

• $10 mm Trisystems 8/15/2012 London based

• $5 mm Taimma 4/2/2012 – Montreal based

• $5 mm Fintechnix 6/1/2012 Australia based , explains the decline Australia’s cash balance

• $2 mm curepet investment – NY based

Cash & ST Investments by Geographic Segment

thousands $s 3/12/2012 5/7/2012 8/7/2012 11/5/2012

US $9,356 $7,489 $8,450 $14,009

CANADA $751 $979 $979 $2,609

LATIN AMERICA $1,067 $1,508 $1,905 $1,603

AUSTRALIA $7,605 $3,123 $3,855 $6,673

SINGAPORE $1,962 $871 $1,508 $1,579

NEW ZEALAND $861 $467 $585 $1,655

INDIA $9,962 $15,875 $4,511 $1,316

EUROPE $1,936

SWEDEN $15 $16 $15 $15

TOTAL $31,579 $30,328 $21,808 $31,395

NON US $22,223 $22,839 $13,358 $17,386

Long-Lived Assets by Geographic Segment

thousands $s 3/30/2011 6/30/2011 9/30/2011 12/31/2011 3/30/2012 6/30/2012 9/30/2012

US $237,464 $245,051 $247,174 $258,347 $261,713 $315,847 $320,124

CANADA $0 $0 $0 $0 $8,925 $9,290

LATIN AMERICA $18,180 $18,664 $18,599 $14,179 $14,452 $12,632 $12,908

AUSTRALIA $1,506 $1,458 $1,292 $1,286 $1,441 $1,401 $1,542

SINGAPORE $70,922 $61,959 $52,549 $63,866 $65,749 $71,456 $71,180

NEW ZEALAND $36 $202 $186 $233 $260 $240 $245

INDIA $3,674 $7,245 $6,824 $8,376 $11,064 $10,376 $10,422

EUROPE $13,696

SWEDEN

TOTAL $331,782 $334,579 $326,624 $346,287 $354,679 $420,877 $439,407

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If Ebix used the $11 million from India to finance any of the above transactions, we wonder if it paid any

taxes related to the necessary repatriation of those funds.

It is Unclear How Ebix Financed its Planetsoft Acquisition Without Repatriating Cash from India

Most of Ebix’s revenue is generated in the US and Australia; the cash somehow makes its way to

Singapore and India. That’s fine, but if the funds then return to the US or other regions to finance

acquisitions, without any payment of taxes … we wonder if it’s too good to be true.

You can keep the cash onshore, and pay a higher tax rate, or you can move the cash offshore, and keep

it there; you can’t have it both ways (the only way one might be able to have it both ways is via some

special financing facility. However, Ebix has never mentioned or disclosed in its filings; furthermore,

Ebix’s balance sheet doesn’t seem able to support such an arrangement).

Planetsoft’s total cost is $40 million, of which $34-35 million was paid in cash. Ebix funded “using a mix

of internal cash reserves and the Bank credit line available to Ebix.”17

The problem with this explanation is it would imply that Ebix’s US cash balance would have gone

negative to finance this transaction, even with their credit line fully maxed out according to our

calculations18:

Note that the calculations shown don’t factor in the following (source of funds would decline):

• Not all revenues are derived from US, which means not all cash flow is US based.

• Planetsoft seems to have closed before 6/30, which means Ebix did not have the full period’s

cash flow to pay for it.

A more plausible explanation is that Ebix used monies from India (without paying taxes). It would make

more sense from a business perspective, as most businesses maintain a certain minimum level of

operating cash to support operations. The other possibility is that the funds never left the US.

As discussed in the prior section, Ebix’s cash disclosures by country shows India is the only region

where Ebix’s cash actually declined in relevant period.

SOURCES OF CASH COMMENTS

Debt $31,000 Net addition to debt.

CFFO $21,000 CFFO is for full period, acquisition closed earlier.

Cash $8,000 US cash estimate, avg. between 5/7 and 8/7

TOTAL $60,000

USES OF CASH OTHER COMMENTS:

Buyback $9,400 The uses of cash exceed sources of cash.

Other acquisitions + capex $15,000 India is only country where cash declines from 5/7 to 8/7.

Planetsoft $34,000

Dividend $3,300

TOTAL $61,700

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Ebix’s Yield on its Cash is Low, Given it Should be Swimming in Interest Earning Assets Offshore

With much higher prevailing interest rates in India, Australia, and Latin America, we struggle to

understand why Ebix has only yielded 1.7%-2.2% on its cash19:

We believe this means that the cash never really leaves the US (& is instead used to make acquisitions),

it leaves only when it has to (for tax compliance purposes), or the cash moves around frequently.

The Undisclosed Related Party Loan in Singapore Further Shields Taxable Income

Based on our calculations, the undisclosed related party loan reduces Singapore taxable income by

around $7,000,000 (Singapore dollars) annually20, so long as the loan (of indefinite duration) remains

outstanding. This is in addition to the tens of millions of dollars in taxes the loans helped save, via the

purchase of intangible assets. We think the indefinite duration of the loan serves no purpose other than

to shield taxes indefinitely.

Also note how the interest expense from this loan exceeds the net interest expense of Ebix, inc. by

around 5x:

Interest Income

thousands $ 2010 2011

Cash + ST investments $29,690 $25,100

Interest income $519 $557

GCR estimate $1,191 $1,007

Reported yield 1.7% 2.2%

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Ebix Software India Private Ltd paid for ConfirmNet, Apparently without Paying Taxes

Ebix appears to have paid 100% cash for Confirmnet, through its Ebix Software India Private Ltd

subsidiary.21 We’re not aware of any taxes Ebix paid for this transaction, even though an Indian entity

paid for a US entity, suggesting funds flowed from India to the US (what appears to be a repatriation

event). If Dell has to pay taxes on funds it returns to the US from various offshore locations, shouldn’t

Ebix?

Recall that it is not clear how much exactly Ebix paid for Confirmnet in the first place, as the India filings

say one thing, and the SEC filings another (as discussed earlier in this report).

Ebix Singapore PTE LTD Purchased Intellectual Property, Apparently without Paying Any Taxes

It would seem that Ebix Singapore PTE LTD’s purchase of E-Z Data’s intellectual property resembles Ebix

India’s purchase of Confirm-Net, i.e. both subsidiaries used foreign funds (that was originally earned

onshore) to finance US acquisitions, apparently without any tax consequences.

Raina claimed in a 2011 investor day (a week immediately after Copperfield Research publicized their

first report on Ebix): "No US IP has been transferred to any other country".22

The Singapore filings and SEC filings suggest otherwise (see the ‘transfer of intangible assets’ line item;

we’re certain the E-Z Data transaction is contained with the $76 million)23:

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Ebix’s Stock Deserves to be Halted

On November 5th, 2012, a Bloomberg story claimed that:1

“Ebix is being investigated by the U.S. Securities and Exchange Commission for its accounting

practices, four people with direct knowledge of the probe said.”

Ebix swiftly issued a press release, in which Robin Raina, Chairman, CEO and President of Ebix, said2:

“The Ebix senior management team has not been advised of nor is it aware of an any SEC

investigation regarding the Company’s previous filings”.

Whatever the case, investors should seriously doubt the accuracy, reliability, completeness of Ebix’s

financial statements, disclosures, and past remarks. We doubt CBH obtained reasonable assurance that

Ebix’s financial statements & schedules were free of misstatement, contrary to their claims otherwise.

We believe that Ebix’s stock should be halted, until its financial statements are reliable, accurate, and

complete. We also believe the current auditor has to go, as they’re not doing their job.

The following serve as the bases of our opinions:

• Ebix never filed its Singapore subsidiary’s 2011 financial statements with the Accounting and

Corporate Regulatory Authority of Singapore (“ACRA”), likely as a result of heightened scrutiny.

• Ebix never filed its India subsidiaries’ 2011 financial statements with India’s Ministry of

Corporate Affairs, likely for the same reasons it did not file with Singapore regulators.

• Ebix Singapore’s 2010 and 2009 financial statements were signed off well over a year after each

respective year’s fiscal year end, even though filings prior to 2009 were all filed within a year.

• Ebix filed the 2010 and 2011 10Ks without Singapore’s 2010 audited financial statements signed

off (Ebix Singapore’s 2010 financial statements were signed off on March 20, 2012).

• Unclear how CBH obtained reasonable assurance that Ebix’s financial statements & schedules

were free of misstatement, without the audited Singapore financial statements.

• Robin Raina claims Ebix parted ways with KPMG, while SEC filings indicate that KPMG resigned.

• We wonder how “independent“ Cherry Bekaert Holland is, given the cozy relationship that

exists between CBH, EBIX, STSI (CBH’s 2nd largest publicly traded client), & tennis star John Isner.

• Ebix added a new Risk Factor –"If we fail to maintain an effective system of internal controls, we

may not be able to accurately determine our financial results or prevent fraud."

• Ebix has flooded the SEC with amended 10Ks, without correcting the irregularities we pointed to.

• Captive and impotent Board of Directors & audit committee. None reside in the United States.

• 58 comment and response letters filed with the SEC, between 2007 and 2012.

• Ebix, formerly known as Delphi, was a posterchild of bad behavior. It was in the red and

indulging in revenue recognition practices that got its audit partner banned/censured by the SEC.

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The Missing 2011 Singapore Financial Statements

Given how crucial Singapore is to Ebix’s alleged tax strategy (as detailed earlier in this report), we were

disappointed to find that Ebix has yet to file its 2011 filings with the Accounting and Corporate

Regulatory Authority of Singapore (“ACRA”)3:

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We also find it funny that Ebix filed for what appears to be a 1-2 month extension in May 2012:

It’s been over 9 months since Ebix Singapore for an extension, and still no 2011 financial statements.

The Missing 2011 India Financial Statements; Ebix filed its 2011 10K before Ebix India’s 2011 Filed

We unsuccessfully tried obtaining the 2011 financial statements for the two India subsidiaries (though

by 2011, we believe they were to be merged, or “amalgamated” into one entity4), using three

independent India-based contacts, over the last 3 months. All mentioned that Ebix had technically filed

some of the forms for 2011, but did not file the financial statements. All three sources stated Ebix did

not release any useful information for 2011. Note that CBH and Ebix signed off on the 2011 10K before

the India filings have been released.

Ebix Singapore PTE LTD Filed its 2010 Financial Statements after Ebix, inc. Filed the 2010 & 2011 10Ks

Ebix somehow released its 2010 & 2011 10Ks before Ebix Singapore released its 2010 financial

statements. The table below shows the dates the filings were signed off:5

Ebix's 10Ks 2010 and 2011 10Ks were Signed Off before the Singapore 2010 Financial Statements was Signed Off

2004 2005 2006 2007 2008 2009 2010 2011

Singapore Filings 9/14/2005 8/14/2006 6/14/2007 7/15/2008 7/30/2009 6/13/2011 3/20/2012 NOT FILED

10Ks 3/18/2005 3/10/2006 4/9/2007 3/28/2008 3/30/2009 3/16/2010 3/16/2011 3/15/2012

Days filed after 10Ks 180 157 66 109 122 454 370 NOT FILED

Director Richard Richard Andrew Baey Baey Graham Graham NOT FILED

Who Signed Off* Baum Baum Wakefield Cheng Song Cheng Song John Prior John Prior NOT FILED

Ebix Auditor BDO BDO BDO HA&W CBH CBH CBH CBH

* Director other than Robin Raina who signed off on the Ebix Singapore filings.

The dates for the 10Ks are the dates when the 10K was originally filed; does not include date of any subsequent

amended.

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It’s unclear how Cherry Bekaert Holland signed off on either the 2010 or 2011 10Ks without the audited

Singapore 2010 filing. It’s also unclear how CBH signed off on the 2011 10K without the 2011 Indian and

Singapore filings.

Also note: Ebix Singapore’s 2010 and 2009 financial statements were signed off well over a year after

each respective year’s fiscal year end. Prior to 2009, however, the Singapore filings were all filed within

a year’s time. We would like to point out that 2008 is when CBH entered the picture. We wonder if this

is a mere coincidence, or sign of something more sinister.

Ebix’s Peculiar New Risk Factor

Ebix snuck in a peculiar new Risk Factor6:

"If we fail to maintain an effective system of internal controls, we may not be able to accurately

determine our financial results or prevent fraud." If we or our independent auditors discover a

material weakness in our controls over financial reporting, the disclosure of that fact, even if

immediately remedied, could significantly reduce the market value of our common stock. In

addition, the existence of any material weakness or significant deficiency would require

management to devote significant time and incur significant expense to remediate any such

weaknesses, and management may not be able to remediate same in a timely manner.”

Captive and Impotent Board of Directors

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. It should concern shareholders that this is the public face

of Ebix’s BOD & audit committee (note that Hans has no demonstrated accounting or finance skills):

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We don’t believe that any of the members of the audit committee are fit to do the job. Two are

unqualified and one does not have the time nor is in proximity to do the job7:

• Hans U. Benz has no demonstrated accounting background or skills; based in Europe.

• Hans Ueli Keller has no demonstrated accounting background or skills; based in Europe.

• Pavan Bhalla, the chairman of the audit committee, is an MBA with no CPA credentials, and

resides in India. He is currently a managing director of Aon Hewitt’s outsourcing operations. We

don’t think he has the time, dedicated resources, or proximity to chair the audit committee.

Ebix has Filed 10 Amended 10Ks In The Last 10 Years, and 7 Before That:

Robin Raina Claims Ebix Left KPMG, Not the Other Way Around

Robin says they went with BDO because BDO gave an offer they couldn’t refuse, they were moving to

Atlanta (from Illinois), and there was to be a KMPG partner change. His tone and words make it sound

like it was on the company’s initiative, not KPMG’s8:

“The fee structure was high. And BDO came in and offered not to exceed 200K. A deal

for 2 years, across the world… Why don’t we move in to BDO? That was the reason we

changed from KMPG, there was no negativity.”

Yet SEC filings clearly show KMPG resigned9:

"KPMG LLP resigned as the independent registered public accounting firm of our Company"

"(1) delegation of authority and what KPMG considered to be inadequate reviews by a person other

than the preparer of accounting information, (2) the lack of a formalized contract review process to

ensure proper revenue recognition, (3) the lack of a complete understanding of the Company’s

income tax positions and related accounts, (4) inadequate documentation for certain unusual

transactions (including the basis for the Company’s accounting conclusions), and (5) internal control

matters (documented and testable control environment) under the Sarbanes-Oxley Act"10

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Cherry Bekaert Holland’s Opinion on Ebix’s Internal Controls is at Complete Odds with the Opinions of

Former Employees and Former Auditors

CBH has claimed11: “In our opinion, Ebix, Inc. maintained, in all material respects, effective internal

control over financial reporting as of December 31, 2011, based on criteria established in Internal Control

— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway

Commission (COSO).” CBH has also made similar claims in prior year’s 10K filings.

The senior billing analyst in the Peak complaint makes claims at complete odds with CBH’s statement.12

One of Ebix’s former auditors, BDO Seidman, also "identified certain significant deficiencies relating to

the Company’s internal control over financial reporting"13

As mentioned in the prior page, KPMG expressed similar concerns as BDO.

Then on December 12, 2008, Ebix, Inc. received notice from Habif, Arogeti & Wynne, LLP of its decision

not to stand for re-appointment as Ebix’s independent registered public accountant.14 Ebix would seem

to be a prized client for Habif, so it seems quite odd to us that it voluntarily left Ebix.

And in the meantime, Ebix’s business has grown in complexity (i.e. there are more subsidiaries).

Therefore, past concerns about its internal controls seem more relevant today, than in the past.

It’s one thing for Ebix to have different auditors for different subsidiaries (which itself is a red flag), but if

CBH is signing off on Ebix’s 2010 and 2011 financial statements without the Singapore 2010 and 2011

filings, that seems like a clear violence, in substance, if not form, of CBH’s duty as an auditor.

The Cherry Bekaert Holland, Ebix, John Isner Connection

Ebix sponsors John Isner, the #22-ranked tennis player in the world. His website says plainly that it is

“powered by EBIX.”15 (see upper right hand corner of the image below). It also mentions that they

recently signed-on with Star Scientific:

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The name ‘Star Scientific” (“STSI”) stuck out because they are CBH’s 2nd largest publicly traded company

client, after Ebix.16

STSI signed Isner to promote their ant-inflammatory product, even though Star Scientific’s mission is to

“promote maintenance of a healthy metabolism and to reduce harm associated with the use of tobacco

at every level.”17 Seems like a funny thing for a tennis player to sponsor himself.

The two operative words for Star Scientific is “stock promotion”. It is in their DNA. The founder and CEO,

Jonnie Williams is a case in point. Mr. Williams has a long history of stock promotion that led to SEC

sanctions18.

“On January 7, Chief Judge Joseph L. Tauro, U.S. District Court for the District of Massachusetts,

entered Orders of Permanent Injunction against Jonnie R. Williams (Williams), a Sarasota,

Florida stock promoter.

The Commission's complaint alleged that the defendants were involved in a fraudulent scheme

to promote Spectra's securities through false publicity in violation of Section 17(a) of the

Securities Act of 1933 and Section lOeb) of the Securities Exchange Act of 1934 and Rule lOb-5

thereunder. Williams was also charged with violations of the beneficial ownership provisions by

his alleged failure to report his sales of Spectra's stock during the course of the publicity

campaign.”

Unsurprisingly, there was a recent negative article titled, “Star Scientific's Made-Up, Misleading

Relationship With Johns Hopkins” by Adam Feuerstein19 (he’s the widely followed Senior Columnist at

TheStreet, who covers biotech/drug stocks)

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Shares Are Worth No More Than $5.00

Ebix is, according to Robin Raina1:

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Is Ebix a good Business? Let’s Look at the Facts

What Robin Raina is not telling you:

• Ebix Has Not Generated Lasting Free Cash Flow

• Raina2: "Our cash-generating rate continues to increase. The story of Ebix is a cash

story." Yet Ebix has actually burned cash during the Reign of Raina:

• Ebix Has a Poor Balance Sheet – Working Capital less Debt is Very Negative & Declining

• Tangible Book Value is Very Negative, and Declining

• Ebix’s Equity is at Risk of Heading to Zero, given Ebix’s Poor Balance Sheet, If:

1. The US IRS, SEC, and other regulatory agencies reclaim cash that belongs to taxpayers

2. Outstanding litigations cost Ebix more than expected

3. The foreign counterparts to the SEC and IRS take action

4. We estimate the IRS liability alone can easily exceed $100 million

Ebix's Free Cash Flow

thousands $ 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD

Cash Flow from Operations ($13,333) ($7,663) ($3,239) ($742) $3,343 $2,810 $5,483 $4,375 $15,039 $26,825 $33,877 $52,779 $71,286 $54,002

Capital Expenditures ($894) ($138) ($520) ($538) ($555) ($366) ($484) ($537) ($1,754) ($615) ($3,129) ($1,754) ($2,829) ($1,468)

Acquisitions ($50) $0 $0 $0 $0 ($8,156) $0 ($15,091) ($14,138) ($73,191) ($44,035) ($18,151) ($18,522) ($57,600)

Free Cash Flow ($14,277) ($7,801) ($3,759) ($1,280) $2,788 ($5,712) $4,999 ($11,253) ($853) ($46,981) ($13,287) $32,874 $49,935 ($5,066)

Cumulative Free Cash Flow ($14,277) ($22,078) ($25,837) ($27,117) ($24,329) ($30,041) ($25,042) ($36,295) ($37,148) ($84,129) ($97,416) ($64,542) ($14,607) ($19,673)

Ebix's Negative Value as a "Net-net"

thousands $ 2006 2007 2008 2009 2010 2011 YTD

Current assets $13,899 $59,405 $25,524 $46,515 $60,782 $63,817 $76,426

Current liabilities $20,008 $25,017 $53,854 $75,097 $39,085 $49,779 $60,661

Working Capital ($6,109) $34,388 ($28,330) ($28,582) $21,697 $14,038 $15,765

Debt $20,486 $15,290 $671 $25,205 $40,218 $71,745

Net-net ($6,109) $13,902 ($43,620) ($29,253) ($3,508) ($26,180) ($55,980)

Ebix's Negative Tangible Book Value

thousands $ 2006 2007 2008 2009 2010 2011 ytd

Book value $26,166 $60,126 $70,142 $170,743 $231,268 $316,115 $352,825

goodwill $23,118 $36,408 $88,488 $157,245 $180,602 $259,218 $337,249

Intangibles $7,867 $7,318 $21,824 $49,728 $53,126 $68,839 $82,281

Tangible book value ($4,819) $16,400 ($40,170) ($36,230) ($2,460) ($11,942) ($66,705)

Potential Back Taxes Owed

thousands $s 2006 2007 2008 2009 2010 2011 YTD TOTAL

Net Income Before Taxes $6,645 $13,199 $28,699 $39,832 $59,654 $73,495 58,543 $280,067

Provision for Income Taxes $680 $533 $1,385 $1,010 $635 $2,117 6,719 $13,079

Effective tax rate 10.2% 4.0% 4.8% 2.5% 1.1% 2.9% 11.5% 4.7%

Statutatory tax rate 34.0% 34.0% 34.0% 34.0% 35.0% 35.0% 35.0% 35.0%

Statutatory tax rate $2,259 $4,488 $9,758 $13,543 $20,879 $25,723 $20,490 $98,023

Potential back taxes owed $1,579 $3,955 $8,373 $12,533 $20,244 $23,606 $13,771 $84,061

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Ebix is Worse than Autonomy; a Would-be Acquirer’s Expected IRR is at Best -80%

The following factors suggest that the expected return on an Ebix LBO or acquisition is quite poor:

• The numbers are unreliable, inaccurate, & incomplete – Why buy something without clarity on

the true economics of the business? Unclear why someone wants to volunteer to be the next

Hewlett Packard or Caterpillar3 (who both recently wrote off nearly their entire investments in

Autonomy and a Chinese acquisition respectively)

• The fundamentals, as reported, are poor – Negative organic growth, debt, negative tangible

book value, and no lasting free cash flow generation, leave no room for error.

• A true turnaround would require significant increases in R&D and Sales & Marketing spend –

Ebix does not invest in its own business; R&D and marketing spend would need to rise

significantly just to play catch-up with comparable businesses. This would eat away at margins

and also take a lot of time.

• Why do business with Robin Raina, who makes inaccurate claims about his business & charity?

• Tax situation could mean game over; going private does not mitigate this risk – a strategic or

financial buyer would inherit the tax bill, interest, and penalties, that an IRS and others impose.

• An unusual provision renders going private unappealing –Ebix's board "unanimously approved"

a change in control provision4, whereby Robin Raina is guaranteed a cash payment of 20% of the

difference between the transaction price and the valuation of the company at $7.95 per share in

the event of a change in control.

• Ebix shares are worth no more than 1.0x sales or $5.00/share – Businesses with declining sales

tend to trade for no more than 1.0x sales (see Hewlett Packard, which trades at 0.25x sales).

Ebix trades at over 3.0x sales. Couple the decline in the core business with all the event and

structural risks identified in this report, and Ebix easily trades in lower single digits.

“So we don't really -- everything that's so entangled in each other, that's so difficult for us to

read.” – Robin Raina in the most earnings call, when asked about organic growth5

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Robin Raina Foundation: a Crumbling Wall of False Integrity

The public is led to believe that Robin Raina is1…

Desiclub.com Top 50 Coolest Desis of 2012

“We can also boast about the do-gooders in our community, such as the mega successful Robin Raina,

for building homes for those not as fortunate as the rest of us.”2

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Robin Raina Tells Investors (and Some Believe Him)3:

“The Company holds its directors, officers and employees to the highest ethical standards in both its

business operations, and in its efforts to achieve long-term value for its shareholders.” – Ebix March 25,

2011 press release4

Robin Raina Foundation

Contrary to conventional wisdom, the great fraudsters of our time – Enron, Stanford, Madoff, etc. – all

surrounded themselves with charity and other walls of false integrity5 to fool and distract their victims:

“White collar criminals build walls of false integrity around them by showcasing their good deeds,

while living a parallel life of crime.” – Sam Antar, former CFO of Crazy Eddie’s

Yet lies have a way of eventually catching up with fraudsters. We believe that time is near for Raina.

• Robin Raina blatantly misrepresented to the South Asia Times about how much his foundation,

the Robin Raina Foundation (“RRF”), typically gives annually.

• RRF’s 2004-2010 tax returns contain material financial irregularities & inaccuracies.

We believe Mr. Raina is worthy of a formal investigation and indictment, given the clear patterns of

misrepresentation as both CEO of Ebix, and Founder/CEO/CFO of the RRF.

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Robin Raina Misrepresents his Foundation’s Level of Giving/Spending

We believe that Robin Raina overstated his foundation’s spending by at least 300%.

South Asia Times: How much you give to the foundation? What is its annual outlay?6

Robin Raina: I hate to talk about it. But yes, a majority of the money that comes in for the

foundation comes from me. In a given year, RRF will typically spend about $2 million.

In reality, RRF has spent at most $3.7 million combined since 2004 (the year of its inception), as the

RRF’s form 990s reveal7:

The most RRF ever spent in a single year was $1 million 2010 – half of what he claims they’ve been

spending in a ‘typical’ year. The foundation spent less than $100,000 in 2011 less than 5% of the typical

$2 million he claimed, and a decline of over 90% from the prior year.

What makes things look much worse is that most of ‘total expenses’ consists of funds transferred to the

Robin Raina Charitable Trust (“RRCT”), Raina’s India-based non-profit. Which raises the question:

Is Robin Raina Foundation a Charity?8

Over 75% of RRF’s total spending consist of (I) non-charitable spending on parties, shows, and other

administrative expenses and (II) a transfer of funds to RRCT. If Raina will misrepresent his foundation’s

charitable spending to the South Asia Times, we don’t see what’s to stop him from doing worse. And it

gets worse.

The Robin Raina Foundation’s Tax Returns are Full of Material Accounting Irregularities

We found several different varieties of accounting irregularities, while combing through RRF’s form 990s.

One variety of discrepancy: RRF’s net assets (i.e., cash) do not add up for 2004-2007’s filings:9

RRF's Total Revenues vs. Total Expenses

thousands $ 2004 2005 2006 2007 2008 2009 2010 2011 TOTAL

Total revenue $192 $422 $714 $611 $1,615 $2,122 $1,728 $1,070 $8,474

Total expenses ($56) ($326) ($598) ($441) ($471) ($704) ($1,054) ($86) ($3,735)

RRF's Questionable Spending Breakdown

thousands $ 2004 2005 2006 2007 2008 2009 2010 2011 TOTAL

Parties, shows, & other admin expense ($145) ($392) ($160) ($104) ($40) ($841)

Funds moved to RRCT ($27) ($6) ($182) ($234) ($590) ($981) ($2,020)

Total questionable spending ($172) ($398) ($342) ($338) ($630) ($981) ($2,861)

Total expenses ($56) ($326) ($598) ($441) ($471) ($704) ($1,054) ($86) ($3,735)

Questionable spending as % of total n.m. 52.8% 66.6% 77.6% 71.8% 89.5% 93.1% n.m. 76.6%

RRF NAV Variance Analysis

2004 2005 2006 2007

As stated in Part I $136,177 $232,293 $348,793 $402,727

Part IV or Part X $136,714 $232,292 $246,292 $246,794

Variance (537) 1 102,501 155,933

% Difference -0.39% 0.00% 29.39% 38.72%

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We examined the irregularities from different angles, and believe the mistakes are not innocent or

accidental. At least $250,000-$500,000 is unaccounted for. We also believe Robin Raina is a very

intelligent and capable man. As a result, it would take extraordinary evidence for us to believe he did

not sign off on these form 990s without knowing they were false.

We’ll leave it to readers and regulators to guess where the money is.

Another accounting irregularity we found is that 2008’s net assets at the end of the year do not

reconcile with its stated beginning of the year net assets adjusted for revenue less expenses10:

Note that Robin Raina signed, under penalty of perjury, that he examined the returns, and that they are

true, correct, and complete11:

“Under penalties of perjury, I declare that I have examined this return, including accompanying

schedules and statements, and to the best of my knowledge and belief, it is true, correct, and

complete.” – Signed, Robin Raina, for the form 990s 2004 – 2011

Unlike lying to the South Asia Times about your charitable activities, lying to the government is a serious

criminal (not civil) offense. We believe there is a strong case for an indictment of, and investigation into

Robin Raina, given:

(I) he has a clear, documented history of misleading and deceiving investors, the IRS, the SEC,

business partners, employees, and the general public at large, and

(II) There is a clear pattern of material irregularities found in the form 990s. Perjury is likely only

the tip of the iceberg.

To summarize, Robin Raina and Ebix:

• Provide investors with inaccurate, unreliable, and incomplete financial statements.

• Use funds that belong to taxpayers to instead fund acquisitions and excess CEO compensation.

• Engage in transparent tax avoidance schemes.

RRF 2008's NAV Variance

2008

Net assets, Beginning of the year $246,794

revenue less expenses $1,144,581

Net assets, End of the year (calculated) $1,391,375

Net assets, End of the year (reported) $1,560,795

Variance ($169,420)

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Meanwhile, Robin Raina and the Robin Raina Foundation:

• Misrepresent its activities, claiming to give at least 5x more than it does.

• Submits tax returns to the IRS with blatant accounting irregularities, inaccuracies, and

incomplete information.

• Spends 75% on its funds on non-charitable and questionable activities.

Gotham City Research is NOT making this up…12

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End Notes

INTRODUCTION

1. Ebix Singapore PTE LTD Report of the Directors and Financial Statements for the financial year

ended 31 December 2010 and 31 December 2009; obtained via ACRA website:

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

2. Ebix 2010 10K, 2011 10K, and Ebix Singapore PTE LTD Financial statements for 2010.

3. Ebix Australia (VIC) Pty Ltd, Annual Financial Report for the Financial Year Ended 2011, 2010, and

2009, filed with the ASIC http://www.asic.gov.au/

4. The South Asian Times, Vol. 5 | No. 37 | January 5-11, 2013

5. Robin Raina Foundation IRS Form 990, 2004 – 2011


Ebix’s Accounting: Unreliable, Inaccurate, and Incomplete

1. Seeking Alpha, EBIX: Not a Chinese Fraud, But a House of Cards Nonetheless, Copperfield

Research, March 22, 2011

2. Ebix, Investor Conference CEO Presentation, April 1, 2011

3. Greg Farrell, Bloomberg News, Ebix Accounting Practices Said to Be Probed by SEC, Nov 7, 2012

http://www.bloomberg.com/news/2012-11-05/ebix-accounting-practices-said-to-be-probed-by-

sec.html

4. Ebix press release, Ebix Responds to Bloomberg Article, Nov 5, 2012,

http://www.ebix.com/pressrelease_text.aspx?artid=252

5. Organic growth goes negative, recent 10Qs suggest past 10Qs were inaccurate

a. If The SEC Cometh the SEC Will Findeth Or So We Suspect, , Copperfield Research,

December 5, 2012

b. Prolonging a Foreign Tax Holiday by Bill Alpert of Barron’s , July 17, 2011

6. Prolonging a Foreign Tax Holiday by Bill Alpert of Barron’s , July 17, 2011

7. Anonymous Article Smells Like Market Manipulation At Its Finest, Jeff Van Rhee, Craig-Hallum,

March 25, 2011


ended 31 December 2010 and 31 December 2009; obtained via ACRA website:

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

9. From ACRA search http://www.acra.gov.sg/

10. Ebix Australia (VIC) Pty Ltd, Annual Financial Report for the Financial Year Ended 2011, 2010, and

2009, filed with the ASIC http://www.asic.gov.au/

11. Ebix 2010 10K, and Ebix Australia (VIC) Pty Ltd, Annual Financial Report for the Financial Year

Ended 2011

12. Ebix 2011 10K, and Ebix Australia (VIC) Pty Ltd, Annual Financial Report for the Financial Year

Ended 2011

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13. Isaac et al v. Ebix Inc, docket number 2:11-cv-00450, Consolidated class action docket number

1:11-CV-02400-RWS

14. Financial Shenanigans, by Howard Schilit

15. Do You Have a Handle on Your unbilled accounts receivables (a/r)? , by Dave Lundsten and Susan

Moser, Partners with Cherry Bekaert Holland

http://www.ncmahq.org/files/Articles/5AE31_CM0907_Finance.pdf

16. Ebix 10Q filings for Q4 2011, Q1 2012, Q2 2012, and Q 2012.

17. From the 2007, 2008, and 2009 10Ks.

18. From Email correspondences with Professor Ketz, January 29, 2013

19. Ebix 2010 10K and 2011 10K ; the amended 2011 filings did not change long-lived assets

20. Ebix 2010 10K, 2011 10K, and the Ebix Singapore PTE LTD Report of the Directors and Financial

Statements for the financial year ended 31 December 2010.

21. Ebix 2011 10K

22. Ebix 2010 and 2011 10Ks

23. Ebix 2008, 2009 and 2010 10Ks. Ebix Software India Private Limited 2008, 2009, and 2010 filings.

The Tax Strategy: Sham in Fact or Sham in Substance


2. From Investor Conference CEO Presentation, as presented by Robin Raina on April 1, 2011

3. The prior tax-related red flags were mentioned by:

a. An Examination of the Risks Associated With Abnormally Low Effective Tax Rates (ETRs),

Gradient Analytics, May 23 2012. http://www.sabrientsystems.com/files/pdf/Effective-

Tax-Rates.pdf

b. Seeking Alpha, EBIX: Not a Chinese Fraud, But a House of Cards Nonetheless, Copperfield

Research March 22, 2011

4. Article 9 of the OECD Model Tax Convention

5. Related Party Loans and Related Party Services, Inland Revenue Authority of Singapore

http://www.iras.gov.sg/irashome/page04.aspx?id=10588


ended 31 December 2009, 2008, 2007, and 2006; obtained via a Singapore contact via the ACRA

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



ended 31 December 2008, via the ACRA website: http://www.acra.gov.sg/

9. Ebix 2008, 2009, and 2010 10Ks

10. The John Graham Prior information was found in the following places:

a. Ebix Singapore PTE LTD Report of the Directors and Financial Statements for the

financial year ended 31 December 2008, 2009, and 2010.

b. SEC filing form 3, dated October 9, 2012.

http://www.sec.gov/Archives/edgar/data/1559511/000118143112054195/xslF345/rrd3

56973.xml

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c. The ‘Contact Us’ and ‘Sales Inquiries’ sections within http://www.ebix.com.sg/



ended 31 December 2008, 2009, and 2010.

13. Dell’s Tax Dodge?, February 6, 2013 http://finance.fortune.cnn.com/2013/02/06/dells-tax-

dodge/

14. Ebix 2011 10K, and the 3 most recent 10Qs.

15. Ebix Purchases Two New Buildings in India, to Build a Office Campus Over 4000 Square Meters,

August, 27 2012 http://www.ebix.com/br/pressrelease_text.aspx?artid=248

16. From the SEC filings and press releases.

17. Ebix Acquires PlanetSoft for $40 Million, June 5, 2012

http://www.ebix.com/br/pressrelease_text.aspx?artid=238

18. Ebix 2011 10K, and the 3 most recent 10Qs.

19. Ebix 2010 and 2011 10K


ended 31 December 2010.

21. Facts and deductions regarding ConfirmNet not paying US taxes

a. Ebix Confirmnet Merger Agreement

b. 10K 2008, 2009, and 2010 filings

c. EBIX Software India Private Ltd 2008,2009, and 2010 filings


23. Singapore filings and SEC filings show Ebix Singapore purchasing US IP (from E-Z Data)

a. Ebix Singapore PTE LTD Report of the Directors and Financial Statements for the

financial year ended 31 December 2009 and 2010.

b. IP ASSET PURCHASE AGREEMENT SINGAPORE E-Z DATA, form 8K, September 30, 2009

Ebix’s Stock Deserves to be Halted

1. Ebix Accounting Practices Said to Be Probed by SEC, Greg Farrell, Bloomberg News, Nov 7, 2012

http://www.bloomberg.com/news/2012-11-05/ebix-accounting-practices-said-to-be-probed-by-

sec.html

2. Ebix Responds to Bloomberg Article, November 5, 2012

http://www.ebix.com/br/pressrelease_text.aspx?artid=252

3. From the ACRA website: http://www.acra.gov.sg/

4. Ministry of Corporate Affairs, India,

http://www.mca.gov.in/DCAPortalWeb/dca/MyMCALogin.do?method=setDefaultProperty&mo

de=12

5. Ebix 10Ks 2004 – 2011, Ebix Singapore PTE LTD financial statements 2004 – 2010

6. Ebix 2011 10K

7. Based on linkedin profiles and biographies according to the Ebix proxy statements

8. Audio recording to the Ebix, Investor Conference CEO Presentation, April 1, 2011

9. Ebix SEC Filing Schedule 14A, November 21, 2005

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10. Ebix 2004 10K

11. Ebix 10K filings

12. Isaac et al v. Ebix Inc, docket number 2:11-cv-00450

13. Ebix 2004 10K

14. Ebix 8K, December 18, 2008

15. http://www.johnisner.com/

16. Capitaliq

17. STSI 10Ks

18. SEC News Digest, Issue 94-17, January 27, 1994

http://www.sec.gov/news/digest/1994/dig012794.pdf

19. Star Scientific's Made-Up, Misleading Relationship With Johns Hopkins, TheStreet, Adam

Feuerstein, January 23, 2013 http://www.thestreet.com/story/11820016/1/star-scientifics-

made-up-misleading-relationship-with-johns-hopkins.html

Shares are Worth No More Than $5



3. Wrong Way to Admit You Blew Millions of Dollars, Jonathan Weil, Bloomberg News, January 24,

2013 http://www.bloomberg.com/news/2013-01-24/wrong-way-to-admit-you-blew-millions-of-

dollars.html

4. Ebix Proxy filing form 14A, October 18, 2010

5. Ebix Q3 2012, Conference Call Transcript, November 8, 2012

Robin Raina Foundation: a Crumbling Wall of False Integrity


2. http://www.desiclub.com/community/culture/culture_article.cfm?id=1071


4. Ebix press release, March 25, 2011

5. http://www.whitecollarfraud.com/white-collar-crime-and-criminals.html



8. Ibid


10. Robin Raina Foundation IRS Form 990, 2008


12. From Robin Raina’s twitter and facebook accounts

a. @RobinRaina1, November 15, 2012

https://twitter.com/RobinRaina1/status/269261187366137856

b. https://www.facebook.com/photo.php?pid=11217167&l=bc5dfc2d8c&id=610711645

the truth about ebix, robin raina, and the robin raina foundation

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