The reported accusations from Muddy Waters short-seller Carson Block about Olam International are “nothing really new,” says James Koh, an analyst at Maybank-Kim Eng.
Bloomberg reported Block said Olam is “heavily” indebted and aggressive in reporting biological gains; “It’s a leap of faith to think the company is being honest with its valuation” gains, Block said at the Ira Sohn Investment Conference in London according to the report. Olam said it is “dismayed at the nature and lack of substance of these assertions and opinions.”
Koh notes “he made three really broad claims against the company, but other than that, we don’t really have any details of what he’s talking about.” He says, “there’s nothing really new. For example, he says it’s highly geared. Most of us know that.”
Olam’s stock is halted, with several analysts expecting it to fall when trade resumes. “The US ADRs suggest it falling about 20%, but I have no idea of how the Singapore stocks are going to do,” Koh says.
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