Date: December 26, 2012
Singapore, December 26, 2012 – Securities Investors Association (Singapore) (“SIAS”) organised an open forum with the senior management team of Olam International (“Olam” or “the Company”) for retail shareholders of the Company on the evening of December 20, 2012. Moderated by Mr. David Gerald, the President of SIAS, Mr. Sunny Verghese, Group Managing Director and CEO, and Mr. Shekhar Anantharaman, Executive Director, Finance & Business Development together addressed shareholders’ queries in connection to negative statements made by both Muddy Waters Research (“MW”) and its director of research Carson Block (“CB”) on the Company.
SIAS’s top priority has always been to ensure that concerns of retail investors who are members of SIAS in any Singapore-listed companies are promptly and adequately addressed. When MW released their research report on Olam, SIAS, on behalf of shareholders also contacted the relevant authorities to seek clarity on the issue. SIAS is pleased that Olam has taken a pro-active step to allay retail investors’ concerns at this dialogue session, especially with its open and transparent approach to investors.
At the forum, Mr. Verghese and his team were quizzed by over 200 retail investors on their concerns. Mr. Verghese recapped the events that followed since the negative statements were made by MW and CB. He established that the allegations, namely about the Company’s solvency, business model, acquisitions and Capex as well as accounting-related assertions, had no basis and no merit and that Olam had an appropriate capital structure, the requisite equity and debt to meet their investment plans, and sufficient liquidity. He reiterated that Olam’s financial statements adhered to the Singapore Financial Reporting Standards and that its strategies were yielding the intended results with most of its acquisitions made since FY2007 performing at or above plan.
Apart from addressing queries relating to Olam not being credit rated as well as the rationale of the recent rights issue, Mr. Verghese also informed the Members that the Board and Management team are working hard to develop strategies to reduce the Company’s vulnerability to short-sellers’ attacks.
“The most important thing to improving shareholder value is for us to execute our plans well and to deliver the results and the share price would follow,” he said.
Mr. Verghese also stressed that Olam will not waste this crisis. “We will emerge a stronger company from this crisis,” he said.
At the forum, Mr David Gerald, President of SIAS said that whilst shorting is not illegal, front-running is. Hence he was pleased that Olam acted strongly, quickly and decisively, and had taken steps to assure investors about the strong value of the Company. Everything Olam has done to-date has been to assuage the serious concerns of the investors.
Mr Gerald informed the retail investors that the Company appears fundamentally sound, led by a strong Board of Directors and Management Team and what is comforting for retail investors should be the fact the Temasek has increased its investing in the Company and is standing by it.
SIAS also encouraged the Board of Olam to consider dual-currency listing and odd-lots trading (of its bonds and warrants to be listed) in order to achieve the best outcome for all shareholders.
David Gerald
President / CEO
SIAS
