Olam CEO calls Muddy Waters' comments "unfair attack"

http://tinyurl.com/watch-news-live-here/?Olam-CEO-calls-Muddy

Olam CEO calls Muddy Waters' comments "unfair attack"

 

Olam has responded to comments made by Muddy Waters founder Carson Block calling it an "unfair attack on the company" and said that it would consider taking legal action if appropriate.

 

The agricultural commodities supplier had asked for its shares to be halted from trading on Tuesday following media reports saying that research firm Muddy Waters had questioned its accounting practices.

 

Despite Olam insisting that the accusations were baseless, its shares came under selling pressure and eventually closed 7.5 per cent lower at S$1.61 after heavy trading.

 

In a conference call with analysts, Olam Chief Executive Officer Sunny Verghese said that the comments' objective was to create panic among shareholders and questioned if those involved were spreading the "baseless assertions" to profit from short-positions in Olam shares. 

 

Media reports had quoted Muddy Waters founder Carson Block saying that Olam was "heavily indebted and aggressive in reporting biological gains on investments."

 

He was also reported to have said that he expects Olam to fail, and that recovery for investors would be negligible.

 

Muddy Waters is expected to release a report on Olam on Tuesday.

 

Previously, negative reports from the short-seller had significantly hurt shares of some Chinese companies listed in the US, including Sino-Forest.

 

Many analysts covering Olam said the issues raised by Muddy Waters were not new.

 

A broker at UOB KayHian which spoke Channel NewsAsia said that Block's argument was inconsistent, as Olam would not fail even if the entire value of its biological assets was written off.

 

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