Olam may slow down after muddy whirlpool

Olam may slow down after muddy whirlpool
Above photo is Mr Verghese.

SINGAPORE - Sometime between receiving the midnight tinkle that upended his world last Monday and yesterday, Olam's Sunny Verghese blinked - just a bit - in the face of research firm Muddy Waters' all-out siege of the commodities trader.

Olam's CEO conceded yesterday that the firm might have to tone down the very thing that defines it - its hard-driving expansion - if it wants to be less of a target for short-sellers like Muddy Waters' Carson Block.

"We will take stock and see whether we need to slow down, decelerate, recalibrate. We're convinced that we've got a great strategy . . . but we might recalibrate . . . the pace at which we are doing things," Mr Verghese told The Business Times yesterday.

Olam's bout of soul- searching comes 11 days after Mr Verghese found himself on the wrong end of a phone call in the dead hours of the morning with a New York-based journalist.

"I was taking a 1.35am flight to Geneva. I was waiting in the departure lounge when a reporter called me and asked if I'd heard that Carson Block and Muddy Waters have made these remarks about Olam at a conference in London," Mr Verghese recalled.

"So I told him it's 12.45 am in Singapore and obviously this is my first time hearing of it."

What Mr Verghese saw next on the Internet made him cancel his flight.

In an 18-slide presentation to hedge fund managers in London on Nov 19, Mr Block had attacked Olam for what he said was its aggressive accounting of its biological gains and accused it of dishonesty, while condemning the firm to failure.

"You should assume we are short on securities of Olam," Mr Block had said.

"I thought, 'This is a serious crisis'," Mr Verghese said yesterday.

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