South Asia Investor Review

A London-based startup builder.ai, founded by an Indian named Sachin Dev Duggal,  recently filed for bankruptcy after its ‘neural network’ was discovered to be 700 Indians coding in India. The company promoted its "code-building AI" to be as easy as "ordering pizza".  It was backed by nearly half a billion dollar investment by top tech investors including Microsoft. The company was valued at $1.5 billion. This is the latest among a series of global scams originating in India.  In recent years, India has emerged as a major hub for global scams. The US government has alleged in court documents that a large enterprise originating from India was involved in stealing nearly $1.5 billion from elderly Americans. Recently, two Indian nationals, Pranay Mamindi and Kishan Patel, were found guilty of participating in a money laundering conspiracy, concealing the source of the money, and using the illegally gained money to further promote a criminal enterprise.  Six other defen...

In yet another blow to Silicon Valley's "fake it till you make it" mantra, a federal jury has convicted former Theranos executive Ramesh "Sunny" Balwani on all 12 counts of fraud. Balwani was born in 1965 in Pakistan to a Sindhi Hindu family.  He attended Aitchison College, an elite prep school in Lahore that is also the alma mater of former Prime Minister Imran Khan of Pakistan. His family emigrated to India in 1984 and then to the United States in 1987. He studied at the University of Texas at Austin and University of California at Berkeley. His one-time girlfriend and partner Elizabeth Holmes, the founder of Theranos, was convicted on similar charges earlier this year. Both face up to 20 years in prison.  Elizabeth Holmes (L) and Sunny Balwani of Theranos "Fake it till you make it" is a well-known phrase in  Silicon Valley . It means to consciously cultivate an attitude, feeling, or perception of competence that you don't currently have by prete...

An Indian-American investor and producer of Bollywood movies has been convicted of mortgage fraud in the United States. How did he scam US banks and investors? How did US mortgage money end up funding Bollywood? To answer these questions, let's look at the broader story of US mortgage fraud and its impact on the international financial markets and the world economy. The French stock market triggered worldwide shares selloff in August 2007 after BNP Paribas, the largest publicly traded bank in France, suspended investors’ ability to remove money from three funds that had invested in American mortgage securities. The bank said it had become temporarily unable to place a value on the funds, which have turned sour as increasing numbers of homeowners have defaulted on their loans. The news came as a shock to many who mistakenly believed the damage from the US mortgage crisis was limited to the US financial markets. How did this happen? The answer lies in how the mortgage business has ch...