Olam countered Muddy Waters’ claims, alleging that the report aimed to create panic among its shareholders, bondholders and creditors. Olam believed the accusations were intended to benefit Block and associates through their short position in Olam securities.
In the early 2010s, as Olam Group expanded its business and enjoyed strong share price performance, it became embroiled in a conflict with US-based short seller Muddy Waters.
After research firm and brokerage Credit Lyonnais Securities Asia raised questions about Olam’s reporting discrepancies in 2011, Muddy Waters founder and CEO Carson Block published a 133-page report a year later. The report accused Olam of using accounting tricks to inflate profits and overspending on low-quality assets, among other allegations.
