SINGAPORE: Olam takes legal action over Carson Block accounting queries
Singapore-based Olam International has started legal action against investment firm Muddy Waters and its founder Carson Block following statements questioning the commodity trader's accounting methods.
Olam confirmed in a statement today (21 November) it had filed a lawsuit in the High Court of Singapore as a result of "negative statements" made by Carson at the Sohn London Investment Conference in London this week.
The dispute between Olam and Carson began when a Muddy Waters director accused the Singapore-based company of booking profits on transactions before it is clear how they would work out over time, according to Bloomberg.
In a statement yesterday, Olam refuted the allegations and said it wanted to highlight that its financial statements have been subject to annual audits by Ernst & Young.
"We wish to reiterate that consistently, and with no exception, the Independent Auditor's Report issued by Ernst & Young are without qualifications whatsoever and have stated that the consolidated annual financial statements of the group are properly drawn up in accordance with the provisions of the Companies Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs and financial results of the group and the company."
Olam said yesterday it had requested for a trading halt pending the release of a "purported and detailed report" by Carson Block and/or Muddy Waters.
"This release has yet to take place. The company is therefore requesting that the trading halt be lifted to allow investors to continue to trade in the company's securities," the company said.
According to Bloomberg, Olam climbed 5.3% in Singapore, the most in three months, to close at S$1.695, before the lawsuit was announced.
Olam said yesterday: "The company and its board of directors strongly rejects the assertions made by Carson Block and/or Muddy Waters. We will reserve the right to take strong and appropriate action with regard to any unsubstantiated or baseless assertions made in the media by parties whose motives might be in question."
Muddy Waters could not be reached for comment at the time of going to press.
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