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Olam International Ltd. (OLAM), the commodity trader targeted by Carson Block, dropped its defamation lawsuit against the short-seller and his research firm Muddy Waters LLC, bowing to advice from shareholders to focus on its business.
“After considering feedback received from several of its shareholders, Olam has decided it should now move forward and focus resources and management attention to deliver value for its continuing shareholders and stakeholders,” the world’s second-largest rice trader said in a statement to the Singapore stock exchange today.
Olam said it hasn’t been able to serve the lawsuit filed in the Singapore High Court on Block. The company had sought unspecified damages, costs, and an injunction against republication of Block’s comments made at a hedge fund conference in London on Nov. 19.
The war of words between Olam and Block began when the Muddy Waters research director questioned the Singapore-based company’s finances and accounting practices. Olam Chief Executive Officer Sunny Verghese said the statements were designed to panic shareholders of the company and the stock slumped 20 percent. It topped the price it last traded at before Block’s attack on March 20, hitting S$1.765. It closed in Singapore today at S$1.665, down 0.3 percent.
Paper Judgment
“There’s no point pursuing a company or person with no assets here,” said David Gerald, a former lawyer and president of the Securities Investors Association of Singapore, which represents retail shareholders. “Even if Olam eventually wins, it’s just a paper judgment. It’s better to focus on what they do best instead of spending time and effort on the lawsuit.”
Since Block and his research firm Muddy Waters LLC first questioned Olam’s finances, the company has raised $712.5 million in new bonds, scrapped an investment in a sugar mill and said it could ratchet back spending as part of an annual review of its businesses, to be completed this month. It’s also won increased backing from Temasek Holdings Pte., Singapore’s state investment firm and now Olam’s biggest shareholder.
Temasek spokesman Stephen Forshaw declined to comment.
“After considering feedback received from several of its shareholders, Olam has decided it should now move forward and focus resources and management attention to deliver value for its continuing shareholders and stakeholders,” the world’s second-largest rice trader said in a statement to the Singapore stock exchange today.
Olam said it hasn’t been able to serve the lawsuit filed in the Singapore High Court on Block. The company had sought unspecified damages, costs, and an injunction against republication of Block’s comments made at a hedge fund conference in London on Nov. 19.
The war of words between Olam and Block began when the Muddy Waters research director questioned the Singapore-based company’s finances and accounting practices. Olam Chief Executive Officer Sunny Verghese said the statements were designed to panic shareholders of the company and the stock slumped 20 percent. It topped the price it last traded at before Block’s attack on March 20, hitting S$1.765. It closed in Singapore today at S$1.665, down 0.3 percent.
Paper Judgment
“There’s no point pursuing a company or person with no assets here,” said David Gerald, a former lawyer and president of the Securities Investors Association of Singapore, which represents retail shareholders. “Even if Olam eventually wins, it’s just a paper judgment. It’s better to focus on what they do best instead of spending time and effort on the lawsuit.”
Since Block and his research firm Muddy Waters LLC first questioned Olam’s finances, the company has raised $712.5 million in new bonds, scrapped an investment in a sugar mill and said it could ratchet back spending as part of an annual review of its businesses, to be completed this month. It’s also won increased backing from Temasek Holdings Pte., Singapore’s state investment firm and now Olam’s biggest shareholder.
Temasek spokesman Stephen Forshaw declined to comment.
