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The latest company slammed by Carson Block and Muddy Waters Research filed a lawsuit today against the short-seller and his firm.Here’s the release from Singapore-based agricultural commodities firm Olam International:
Singapore, November 21, 2012
Olam International Limited has today initiated legal action in the High Court of Singapore against both Muddy Waters LLC and Carson Block for the statements made at the Sohn London Investment Conference in London on November 19, 2012.
Block is best known for releasing a scathing report about Chinese timber company Sino-Forest that the company overstated its timberland holdings causing the stock-price to tank. Famed hedge fund manager John Paulson was Sino-Forest’s largest shareholder.
At the Ira Sohn Investment Conference in London on Monday, Block questioned the accounting practices of Olam and said he thinks the company will fail, Bloomberg News reported.
The next day, Muddy Waters published a scathing letter to Olam International and its board.
Here’s a taste of what was written:
To Olam CEO Sunny Verghese and the Board of Directors:
In the two and one-half years Muddy Waters, LLC has been openly criticising publicly-traded companies, we have not seen a response as defensive as yours – not even from Sino-Forest. On Monday, our Director of Research gave a brief talk on Olam at a well-respected charity event. He presented facts about Olam along with Muddy Waters’s opinion that Olam is at risk of collapsing due multiple factors, including its debt load. As Olam has since said, his comments were not overly substantive. But based on this alone, Olam halted its stock, scheduled two conference calls, discussed buying back shares, and issued statements that included saying it is not a “fly-by-night company”. It has further evidenced a bizarre fixation on baseball caps.
What’s more is Muddy Waters signed the letter with “warmest regards.”
[Hat Tip: Dealbook]
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