On Monday, 19 November 2012, during a speech at the Investment Forum in London, Carson Block, the creator and research director of Muddy Waters LLC (MW), challenged Olam International (Olam), an important agricultural trading company on the Singapore Exchange. Block challenged accounting practices and the business's huge debts and indicated that he was short selling the stock. Following this news, trading on the stock of Olam was instantly suspended at Singapore Exchange.
Olam International Financial Reporting and Disclosure Case Study Solution
In significantly less than ten minutes after trading resumed, the stock price plummeted by 11%, creating the biggest single-day fall in six months. One week later, on Tuesday, 27 November 2012, MW released a 133-page-long research report on Olam, challenging its solvency, bookkeeping practices, business model and capital expenditure. On December 17, Olam's stock price closed at S$1.395. It was the very first time since March 2009 that the stock price had fallen below S$1.40. In the month following Block's criticism, Olam's stock price dropped nearly 20%. The case reviews and analyzes the reasons for the tremendously negative answer to Block's investigation Olam's answers to the crisis aiming to uncover insights and lessons from the episode.
PUBLICATION DATE: October 10, 2014 PRODUCT #: NTU058-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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