Concerns regarding Olam's accounting were originally raised by an analyst at CLSA back in February 2011. The company was then attacked by short-seller Muddy Waters at an investment conference in November 2012. The short-seller went on to publish at least six reports on Olam over the next 14 months. The main thrust was that Olam was using aggressive accounting to revalue acquisitions and capex - a similar practice to Enron. This was masking poor returns from aggressive capex and a weakening financial position. The short-seller also alluded to fraud. Although Olam denied the allegations, it announced a US$1.2bn capital raising in December 2012 which seemed to validate Muddy Waters' claims that Olam was in a precarious financial position. Without the support of the Singapore government via Temasek, it is thought that Olam would not have survived.

Last updated September 2021

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