Olam has fought back immediately. On 28 Nov, Olam published 133 pages report, it starts by saying:
“Everyone is entitled to their own opinions, but they are not entitled to their own facts” Senator Daniel Patrick Moynihan (1927-2003)
We refute the report’s allegations which are false and misleading. Our rebuttal to the 133 page report demonstrates the lack of substance in the claims. Our message to Carson Block (“CB”) and Muddy Waters (“MW”) is therefore clear – this time the mud won’t stick.
Whatever the case, the share price of Olam is already damaged
Here is the summary of the report:
- SOLVENCY: Olam faces no risk of insolvency. We have proactively planned for an appropriate capital structure and raised the requisite equity and debt to meet our investment plans. We have sufficient liquidity to pursue our current business as well as future investment plans.
- ACCOUNTING RELATED ASSERTIONS: Our financial statements and accounting policies strictly follow and adhere to the Singapore Financial Reporting Standards (“SFRS”). Gains generated by accounting for negative goodwill in certain acquisitions are treated as ‘exceptional’ which are one-off in nature and are excluded when reporting the core operational profits of the company
- BUSINESS MODEL: Our differentiated strategy is working, is yielding the intended results, and has helped us build leadership positions in many of our businesses. Therefore we intend to stay the course.
- ACQUISITIONS AND CAPEX: Both organic Capex and M&A plans are an outcome of a conscious and deliberate strategy which has been well articulated and constantly refreshed. We have a proven track record of unlocking value through acquisitions and pursuing profitable organic growth.