KNOW YOUR TRUE NORTH

By SHAGORIKA EASWAR

On a flight from Mumbai to Delhi, Neeraj Monga looked at the empty seats around him. Unlike some who might be tempted to stretch out, he wondered how the airline stayed afloat.

After returning to Canada, Monga, a forensic accountant and financial analyst who works in equity research and corporate governance, went through publicly available information on the airline and within a few hours, concluded it was “a dead company”.

The airline was Kingfisher and the year was 2010.

When a summer intern joined Veritas, the firm he was with at the time, he gave the file to him. The student was at first very enthusiastic about the airline, having consumed what Monga describes as the Koolaid Indian media was feeding people. Then he dug deeper to answer the questions Monga was asking.

The report was published a few months later, causing a furore.

“I don’t want to take too much credit,” says Monga, who is profiled in the documentary Bad Boy Billionaires on Netflix for his role in uncovering the truth about Kingfisher airline.

But nobody disputed their findings though Vijay Mallya, the founder of Kingfisher airline and one of India’s most flamboyant billionaires, claimed it contained factual inaccuracies.

“It didn’t,” says Monga. “If it did, they would have served us with a lawsuit.”

Monga also predicted the demise of Anil Ambani’s business empire, and flagged problems at the Indian commercial real estate developer DLF. In Canada, he said the Yellow Pages Income Fund wasn’t the greatest investment, at a time when it was the second largest trust in the country.

“We studied 13 of their largest markets, looked at all ads by size, colour and placement, and it was clear that their ad revenue was declining. People were beginning to use Google search to look up information by then, they didn’t need directories like before. We asked concierges at condo towers and they said 95 per cent of directories dropped off there were being sent to recycling. Yellow Pages was only staying up because of price increase, but that can’t make up for business decline.”

They were told they were off-base by no less than 13 Bay Street experts.

Monga came back with more data to back what they were saying. And was proven right.

A similar thing happened with the Canadian life sciences company MDS Inc that wanted to build a nuclear reactor to make radio isotopes for medical use.

“I knew that nuclear reactors don’t just fall from the sky,” he says. “They require significant technology and investment, there are safety issues. One of their labs doing Proteomics, another hot area at the time, unrelated to the isotope business, reminded me of my grade 10 laboratory at school in India. That made me curious. Was it really worth so much just because they said so? I said it’s never going to happen.”

Bay Street was shocked. Again. He was called the “reactor guy”, but Monga didn’t back off. “I put myself out there, I can go to any lengths to get the right answer.”

When everyone is going rah-rah about an organization, he doesn’t shy away from saying, “Nah, that doesn’t smell right,” when the numbers don’t read right.

That stems from having experience in multiple jurisdictions, says Monga, who was born and raised in India, has lived in Africa and has studied and worked in Canada since 1998. 

The important thing about investing, in an the intellect-driven world, says Monga, is knowing whom you can trust.

“You should also be willing to learn new things. I’ve never been good at video games, but I am learning from my son! About this thing called Epic Games in which people who play video games have 100 million followers.”

Is his mind constantly scanning business-related information, always fact-checking?

“In a manner of speaking, yes,” he admits. “I’m in the investing business. I’m curious about the world around me, I’m interested in everything from my morning cup of coffee to the linens on my bed at night... things all of us use. It becomes second nature.”

The son of an academic who taught organizational behaviour and human resource management, Monga could have followed the same path. But interested in business from a very young age, he was reading publications such as Business India and Business World from when he was in grade 9.

“I recall the Harshad Mehta scandal. I got into equity research. I got sidetracked in a way into strategy consulting, but my first job was with The Economic Times for which I covered equity markets.

Learning that big-name companies picked students from the best universities, he enrolled at the Richard Ivey School of Business at the University of Western Ontario.

“Mainly because it offered the same world-class education as Harvard, and I could afford the first-year tuition with my limited financial resources. I could then apply for Canadian residency after five months and get a student loan to cover the second year.”

He landed in Canada in 1998 and apart from the course itself, found almost everything challenging.

Used to having dinner after sunset, he wondered why he was so hungry every evening – the sun was setting around 10 pm in August!

He’d rented a room in a basement apartment and when the potential landlord came to pick him up from the airport, he told Monga it was a mere minutes away from the bus stop from where it was a straight ride to the university. It was, until one morning Monga opened the door and stepped into three feet of snow.  With no winter boots, nor a proper winter jacket, that walk is still etched in his memory.

“It took me 25 minutes to wade through the snow! Finding the kind of food I was used to was also hard. But it was learning by experience.”

Monga was offered an internship by his professor in his very first summer. Straight out of management school, he landed a job with Bain & Company, the organization that Mitt Romney once worked for. Let go along with 70 per cent of the work force during the tech and telecom shakedown all across North America, he joined Veritas as their first employee and would go on to become executive vice-president and head of research before leaving to launch his own company, Antya.

Antya is an ancient Indian mathematical term meaning one thousand trillion. It represents the infinite options in the investment world, says Monga. His firm offers discretionary investment management services to Canadian investors, helping them preserve and enhance capital through focused and disciplined wealth management.

Some of the most respected institutional investors globally seek his advice on corporate governance and security valuation, and in performance from portfolio, Antya is probably in the top one per cent of money managers in North America, based on its returns in the equity growth portfolio.

“We look for asymmetrical investment opportunities for our clients and accounting integrity – honest, transparent management, consistent financial statements, no obfuscation,” says Monga. 

Monga’s advice for ordinary folk – not the ones with millions of dollars – is simple. It’s time to be very conservative.

And to those who are eager to save in education funds and RESPs for their kids’ future education, he says be aware of aggressive selling, don’t pay too high a fee for the plan.

His response to those that accost him at parties and want that one tip that will make them rich?

“I don’t do tips. Every situation is different. Investments are centred around a portfolio, a single stock tip doesn’t do anything. If it did, we’d all be millionaires!”

He tells those who seek his guidance on finding success in Canada that they have to first know where they are headed.

“Know your True North. Then stay the course. Take a professional path and keep working hard to make it happen. And take calculated risk. People think that an accent can come in the way and it might, but everyone here is competing on an equal intellectual basis. In Canada, 99 per cent of the people are as educated, or more, than you. When I graduated 20 years ago, most people had two degrees. There was a doctor or a CA doing his MBA with me. Now, three or four degrees are the norm.

“Think of it as a marginal return on investment. The marginal return on education diminishes as more and more people attain the same education. So you have to pull yourself above the crowd.”

Having witnessed the dotcom bubble burst, and with his overview of the world of finance, he sees a difference in how the developed world and the developing world will be affected long term by the current pandemic.

“Things will start to recover in a year or two in North America and Europe, and take maybe closer to three or four years in the developing world. Until then, in the developing world, they will see terrible poverty. The repeated shutdowns of business and travel have affected tourism, the primary source of foreign exchange in a country like India, along with a host of other businesses. By the time the vaccine comes, it will be too little, too late.”

In a published report on the subject, COVID-19 – Slaying the Rational Skeptic, Mortgaging our Economic Future & Squashing the Poor, he concludes that predictions of calamity are based more on fiction than fact. “COVID-19 has provided a platform to political leaders to display empathy in front of a TV audience while sowing fear and doling out cash in the hope of being re-elected.”

He invites “all those involved in the decisions to confine populations to contribute their salaries, pensions, and savings to a public fund, for the benefit of small and medium business, self-employed professionals, and others in the bottom quintile of earnings”.

Monga and his wife Dimple have two kids, Sanjana, 13, and Arjun, 9.

“They don’t get why their father is reading and writing all the time!” says Monga with a chuckle. “For Arjun, particularly, homework is something to be done quickly so he can get back to more fun stuff, so he’s, like, ‘Why are you doing this? Who is setting you all this work?’”

But it’s not all work and no play for Monga who enjoys quality time with family. “I don’t play golf. I’d much rather shoot hoops with Arjun or learn video games from him and I play football with Sanjana. I enjoy watching movies, socializing with our family’s circle of friends. Of course, not much of that happening this year.”

Monga pursued success because he wanted to be the best in what he did,  he says.

“I managed to do that, but what continues to drive me is that now I have a more tempered outlook. Earlier, I was cocky, now I know I can be wrong, that I don’t know everything. It’s important to keep learning. To change your position as facts change.”

 • Grant’s is proud to present this series about people who are making a difference in the community. Represented by PMA Canada (www.pmacanada.com).