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  "docSlug": "ad39e81239e4",
  "documentTitle": "Olam International Ltd. (SGX:O32)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2012-11-27 00:00:00",
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  "pageNumber": 24,
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  "notes": "This is a page from a research report (likely Muddy Waters or similar short-seller report) exposing Olam's contradictory statements regarding government subsidies.",
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      "text": "It does not seem logical or realistic that Olam is forced to pass on its incentives to its suppliers.",
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      "kind": "paragraph",
      "text": "The aim of the EEG is to clearly benefit the exporter, if there was no financial benefit to the exporter in receiving a grant then there would be no motivation for the exporter to increase its export sales.",
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      "kind": "paragraph",
      "text": "Olam, in its response to CLSA, claimed the following (emphasis added): \"When we receive export incentives in Nigeria which are recorded separately as a line item in our P&L, we have to pass on almost all of this to our suppliers...\"",
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      "kind": "paragraph",
      "text": "We have spoken to Nigerian businesspeople regarding Olam, and they have opined that farmers sell to Olam because there is generally little competition for Olam on the supply side.",
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      "kind": "paragraph",
      "text": "In the above paragraph, Olam obfuscates the issue further, by emphasizing that it \"[has] to pass on\" the incentives to their suppliers. If companies are forced to pass on the incentives to their suppliers, then it does not look like there is any incentive at all.",
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      "text": "\"When we receive export incentives in Nigeria which are recorded separately as a line item in our P&L, we have to pass on almost all of this to our suppliers thereby increasing our costs of procurement. Therefore, what is recorded as export incentives does not directly flow down to our profits.\" — Olam, \"Clarifications on CSLA Analyst Report dated 21st February 2011\". \"The Export Expansion Grant is an initiative of the Federal Government, aimed at encouraging exporters of non-oil products...\" — http://allafrica.com/stories/201208290128.html. \"The EEG is not under any threat... We are putting structures in place to make sure that the EEG is not abused in the future.\" — Nigerian Minister of Trade and Investment, Mr. Aganga.",
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      "kind": "source-note",
      "text": "41 “Clarifications on CSLA Analyst Report dated 21st February 2011” as posted on Olam’s website. 42 http://allafrica.com/stories/201208290128.html 43 Ibid.",
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