Short seller with Olam in his sights It was a pitch perfect delivery to a dangerously influential audience: on Monday afternoon, in the bowels of the Marriott hotel on Grosvenor Square in London, Carson Block, one of the world's most closely followed short sellers, laid out the case against his latest target. "Today I want to talk to you about Olam," Mr Block said, before pausing to let the statement settle in. The great and the good of London's hedge fund world - guests of the inaugural Ira Sohn investment conference in London - shifted in their seats as Mr Block, square-built and clean-shaven, delivered his allegations. It only took a few hours for Mr Block's spartan, 18-slide presentation to have an effect. By late evening, London time, Olam, a leading international commodity trading house, saw its shares slide 17 per cent in over-the-counter trading in New York. Mr Block's presentation accuses Olam of accounting "shenanigans" and overindebtedness, which, he says, mean the company is hugely overvalued. Olam has rejected the claims. Sunny Verghese, chief executive and founder of Olam, which trades niche commodities from cashew nuts to wool as well as investing in dairy farms and plantations, described the attack on his company as "baseless" and "rumour-mongering." In a conference call with analysts on Tuesday, Mr Verghese questioned Muddy Waters's approach and motivations. He said that someone he believed to be Mr Block had appeared at Olam's offices on November 1, a day after its annual shareholder meeting, in what Mr Verghese said was a disguise of baseball cap, T-shirt and jeans and claiming he was an investor in a hedge fund that was an Olam shareholder. All of my colleagues were sure it was Carson Block. When we pushed him he said he didn't carry a card and said he was an investor in the hedge fund that came to visit us that day and as an investor he makes it a habit to visit those companies," Mr Verghese said. A spokesman for Muddy Waters declined to comment. Mr Block's claims against the Singapore-based company are not entirely new. In early 2011, a report produced by Asian equity broker and research house CLSA, which questioned Olam's accounting and valuation of Nigerian assets, also triggered a sell-off in the companies shares. But he has form. The American analyst is a newly made star in the short selling firmament, and owes his fame to the collapse of the Toronto-listed Chinese timber concern, Sino-Forest last year. In June, his private firm, Muddy Waters, which does not manage money for outside investors, released a detailed report alleging accounting irregularities at the firm, which he said overstated the extent of its assets in China. Shares fell 85 per cent within a month, all but wiping out Sino-Forest investors, including Hank Greenberg, the former chief executive of AIG, the insurance group, and John Paulson, the hedge fund manager who made more than $20bn betting against subprime mortgages. The firm later went into bankruptcy. Mr Block was catapulted into investment stardom. He is now a fixture of the financial punditocracy. Mr Block's focus until now has been Chinese firms listed, like Sino-Forest, in Western markets. Although Sino-Forest made his name, it was not his first and only success. In 2010, Mr Block triggered an 80 per cent slump in shares for Nasdaq-listed Rino International following a damning report from Muddy Waters. The company became the subject of an SEC investigation and delisted. Another report into China MediaExpress caused a 30 per cent fall in its shares before it too delisted. With another firm, though, Mr Block appeared to have got his research wrong. A Muddy Waters report into Orient Paper, a paper company in Hebei, China, triggered a 47 per cent drop in the company's share price. Orient went on to hire three independent firms to look into Mr Block's allegations, including Deloitte. The firms" three-month investigation concluded Mr Block's allegations were unfounded. With Olam, one thing for the time being is sure: Mr Block is betting his reputation on taking on a much bigger beast. Olam counts major institutional investors like Singapore's sovereign wealth fund Temasek on its share register. It has deep relationships with numerous banks and, as its website makes clear, it is one of the largest players in global foodstuffs. It's therefore a mark of how far Mr Block has come that, notwithstanding its position, Olam finds itself having to mount a major rebuttal of Mr Block's allegations. Mr Verghese has emphatically rejected everything Mr Block has said in numerous phone calls with journalists and investors and is worried that a campaign is being waged against his company. And indeed it is true that market players with deep pockets and serious track records appear to be taking Mr Block's remarks seriously. Emails and phone calls have been belting around the converted town houses and swanky offices that house London's hedge funds, seeking copies of his presentation to the Sohn conference. In May, short interest in Olam - a measure of how much of the company's stock is being sold short - doubled from 5 to 10 per cent and has been growing since. According to data provider Markit, 13.4 per cent of Olam shares are now being sold short. Those doing so, apart from Mr Block, are big names. "One of the positions we are short is Olam," John Armitage, founder of Egerton Capital, one of Europe's most successful and longstanding equity hedge funds, told attendees at the conference on Monday. It has been very profitable. Additional reporting by Jeremy Grant in Singapore and Jack Farchy in London