UPDATE: Olam Turns to Court in Battle against Muddy Waters’ Allegations

on Nov 22, 2012
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**Olam Files Lawsuit against Muddy Waters Based on “Libel, Slander and Malicious Falsehood”**

Olam International (SGX:O32, PKC:OLMIF), one of Asia’s largest agribusiness companies, announced that it is taking its battle with short-seller Muddy Waters and its founder, Carson Block, to court as it fights off accusations levelled at its accounting practices and debt levels that have battered its share and bond prices, The Financial Times reported on 21 November 2012.

The lawsuit, filed in the High Court of Singapore, where Olam is based, adds fuel to the increasingly acrimonious war of words between the Asian agribusinesses and the US firm. As iNVEZZ reported earlier this week, during a conference call in London on Monday Mr Block questioned Olam’s accountancy practices and said that the Singaporean commodity trader was on the verge of collapse. This attack has sent Olam’s stock to record lows and provoked a defensive reaction from the agribusiness, whose chief executive and founder, Sunny Verghese, described Mr Blocks’ accusations as “baseless” and “rumour-mongering”.

!m[Singapore-Based Agribusiness Company Sues Short-Seller Over Accountancy Claims That Hit Stock](/uploads/story/876/thumbs/pic1_inline.png)A spokesman for Olam said the company has sued Mr Block and Muddy Waters for alleged “libel, slander and malicious falsehood” and the company is seeking damages based on the advice of its lawyers. Olam’s general manager of investor relations Aditya Renjen told The Financila Times:

“All of the assertions made [in London] have not been substantiated by any report or publication which gave us these grounds to pursue this course of action.”
**Muddy Waters Reaction**
In line with Olam’s statement, many analysts had expected Muddy Waters, which is known for publishing highly critical reports on Chinese companies listed in North America, to publish a report detailing his criticisms of the Singaporean commodity supplier, but this has not yet materialised. After Olam’s defensive response, Muddy Waters only published a letter on its website, saying that it always criticises publicly-traded companies, but none of them have been as defensive as Olam. The US short-seller also said that instead of attacking the critics, Olam should focus on putting its finances right.
In reaction to Olam’s announcement that is suing Muddy Waters, the US short-seller denied receiving a lawsuit. A spokesperson for Muddy Waters said: “We have not received a lawsuit and, should we have to defend ourselves, we will do so vigorously.”

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