Olam launches defence against Muddy Waters Sunny Verghese, chief executive of the agricultural trader, described the attack on his company as 'baseless' Olam, the Singapore-listed agricultural trader, has launched an impassioned defence of its integrity after comments from a well-known US shortseller caused its shares to plunge by a fifth. Carson Block, founder of Muddy Waters Research, triggered a precipitous 20.9 per cent drop in Olam's shares in the US over-the-counter market after he told an investment conference in London that he was betting against the company. Mr Block criticised the debt levels of the Singapore-listed company, saying that it had "reacted to the 2008 crisis by deciding to take huge leverage and invest in illiquid positions." He also questioned Olam's accounting practices, including the way it has booked profits on some of its acquisitions as well as its valuation of its plantations, crops and livestock. "This is not a black box, this is a black hole," Mr Block told the Ira Sohn investment conference in London, a charitable event attended by some of the European hedge fund industry's biggest names. But Sunny Verghese, chief executive and founder of Olam, which trades niche commodities from cashew nuts to wool as well as investing in farms and plantations, described the attack on his company as "baseless" and "rumour-mongering." "We feel that this is a great injustice being done to us and our stakeholders," Mr Verghese told the Financial Times. We are not a fly-by-night company. We are one of the most transparent companies in our sector; we have been recognised as such for a long period of time. Olam's second-largest investor is Temasek, the Singapore government's investment arm, which holds a 16 per cent stake. Muddy Waters is a short-selling group that rose to prominence last year when one of its reports sparked a collapse in the share price of Sino-Forest, ending with the Chinese forestry company filing for bankruptcy protection in March. The company takes short positions in its targets before publishing research. "You should assume we are short securities of Olam," Mr Block said on Monday. Muddy Waters is expected to publish a report on Olam early on Tuesday. Mr Verghese said Muddy Waters had not given Olam any opportunity to respond to its criticisms before Mr Block's presentation but that he would respond in detail to every issue raised by the report. I feel that they somehow don't care about facts. That is not really important to them - just how much they can profit. He said that Olam had noticed a large increase in short positions in its shares in the past month. John Armitage, founder of Egerton Capital, one of the world's top equity hedge funds, told the London conference after Mr Block's speech that he was also short Olam. The position had been very profitable, he said. Olam's shares in Singapore had fallen 18 per cent this year before Mr Block's presentation.