Forensic Analyst, Trudence Capital Advisors

Nitin Mangal

Nitin Mangal is a Research Analyst with more than 15 years of experience in Indian equities. He is Pioneer of Corporate Governance and Accounting Research in Indian Market and has successfully developed product for Institutional Investors named as "Analysis Beyond Consensus" during his association with Edelweiss Securities Ltd, Mumbai. Later during the career, he has worked with Veritas Investment Research Corporation, Canada as Asia Consultant covering Indian and US equities. He has been profiled by leading financial newspapers such as Wall Street Journal, Business Standard etc

Forensic Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Forensic Accounting

Best World International / Forensic Accounting

<a href="https://www.smartkarma.com/entities/best-world-international-ltd" target="_blank" data-smartkarma-citation="entities:4600:1" rel="noopener">Best World International (BEST SP),</a> a Singapore based beauty and wellness products player, has been on a back-foot for almost two years when its shares were stopped from trading on the SGX back in May 2019. This was primarily on the back of fictitious growth in China coupled with fabricated sales to one of its import agent, reported by <a href="https://www.businesstimes.com.sg/companies-markets/sales-of-drs-secret-in-china-best-worlds-best-kept-secret" target="_blank" rel="noopener">Business Times Article</a> and <a href="https://www.bonitasresearch.com/wp-content/uploads/dlm_uploads/2019/04/BonitasResearch-Short-Best_World-SGX_CGN-BBerg_BEST-Fraud-24April2019.pdf" target="_blank" rel="noopener">Bonitas Research Report</a>.
Since China was the epicenter reason of its starry financials, the regulator (SGX RegCo) had to take immediate action and consequently ordered Best to conduct an independent audit regarding its complicated business model in China. Once PwC had concluded their investigation, the SGX RegCo had asked the company to address the various disclaimer of opinions post which the company engaged BDO Advisory Pte Ltd and came up with a list of measures.
The company had also announced its newly audited results for the F18, F19 and F20 that make adjustments to the irregularities. It has complied with the regulator and also kept on publishing the results after the trading halt. The recent announcements have been very critical wherein the company has come up with its trading resumption proposal alongside a strong Q4 growth. It also has a regular track record of doing buybacks, and also did a buyback of SGD 8.6 mn in mid 2019. Thus, Best remains one of the hot topics since a couple of months.
From a forensic point of view, it is clear that there are visible green-shoots when it comes to growth, but some of the fundamentals indicate that there is a mighty chance of aggressive revenue recognition. Even if the stock gets resumed on the bourse, the fundamentals are running adrift from being strong.
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This insight does not deep dive into the audit assessment but rather assesses how the recent financials look like.
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Best World International (BEST SP), a Singapore based beauty and wellness products player, has been on a back-foot for almost two years when its shares were stopped from trading on the SGX back in May 2019. This was primarily on the back of fictitious growth in China coupled with fabricated sales to one of its import agent, reported by Business Times Article and Bonitas Research Report.
Since China was the epicenter reason of its starry financials, the regulator (SGX RegCo) had to take immediate action and consequently ordered Best to conduct an independent audit regarding its complicated business model in China. Once PwC had concluded their investigation, the SGX RegCo had asked the company to address the various disclaimer of opinions post which the company engaged BDO Advisory Pte Ltd and came up with a list of measures.
The company had also announced its newly audited results for the F18, F19 and F20 that make adjustments to the irregularities. It has complied with the regulator and also kept on publishing the results after the trading halt. The recent announcements have been very critical wherein the company has come up with its trading resumption proposal alongside a strong Q4 growth. It also has a regular track record of doing buybacks, and also did a buyback of SGD 8.6 mn in mid 2019. Thus, Best remains one of the hot topics since a couple of months.
From a forensic point of view, it is clear that there are visible green-shoots when it comes to growth, but some of the fundamentals indicate that there is a mighty chance of aggressive revenue recognition. Even if the stock gets resumed on the bourse, the fundamentals are running adrift from being strong.

This insight does not deep dive into the audit assessment but rather assesses how the recent financials look like.


Best World International: Fundamentals Still Pose Some Gray Areas