{ "docId": "019dd923-622c-750b-8b96-063645a867ac", "docSlug": "ad39e81239e4", "documentTitle": "Olam International Ltd. (SGX:O32)", "authorId": "51_Muddy_Waters", "authorName": "Carson Block", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2012-11-27 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 66, "pageCount": 133, "prevPage": 65, "nextPage": 67, "slideType": "villain_critique", "function": "name_villain", "density": "overcrowded", "nDataPoints": 1, "notes": "The slide details the racketeering and fraud at SK Foods, providing context for Olam's acquisition strategy.", "elementsJson": [ "paragraph", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-063645a867ac/66", "deckHref": "/decks/019dd923-622c-750b-8b96-063645a867ac", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-063645a867ac.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-063645a867ac#slide-66", "components": [ { "bbox": null, "kind": "callout", "text": "To Olam, an opportunity to pick up a large processing company at a discount, gain quick entry to a new segment of the US processed foods market, and potentially pick up over $200 million in revenue, must have looked ripe.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-25b3-7229-befc-d421bd9d6070", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.708, "x": 0.146, "y": 0.684 }, "kind": "paragraph", "text": "On May 15, 2009, SK Foods filed for Chapter 11 bankruptcy. The bankruptcy proceedings were fast-tracked in order to sell the company as a going concern prior to the start of the July tomato harvest and the canning season. An ambitious goal of closing the", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a74d4f80-b0ca-4abb-a967-ba7656bb3056", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.708, "x": 0.146, "y": 0.268 }, "kind": "paragraph", "text": "As revelations of the sale of unsafe products being sold for years and cover-ups through document fraud came to light, considerable concern about product quality and safety was justified. Trade magazines such as Food Safety News brought to light the comments of company executives such as Randall Lee Rahal, a Director of SK Foods, and the salesman, who in December of 2008, was one of the first to plead guilty and cooperate in the investigation. Rahal’s statements on SK’s operations revealed little to no concern for quality, and no intention to improve:", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a8bdce96-5ea2-409e-b2f3-aef5022d701b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.708, "x": 0.146, "y": 0.458 }, "kind": "paragraph", "text": "For a period of more than ten years, CEO Salyer and key managers and employees coordinated a racketeering enterprise, paid kickbacks to customers to buy products and pay inflated prices, and falsified product quality documents to allow moldy tomato paste and other sub-standard products to be passed off as compliant with FDA requirements, USDA requirements, “organic”, or compliant with other customer specifications. The scandal was national news, and these headlines caught the attention of Olam, which was eager to expand its US and packaged food businesses. To Olam, an opportunity to pick up a large processing company at a discount, gain quick entry to a new segment of the US processed foods market, and potentially pick up over $200 million in revenue, must have looked ripe.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e5a84dc8-dd10-467b-bcb2-784987328726", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.708, "x": 0.146, "y": 0.094 }, "kind": "paragraph", "text": "Criminal Investigations, and the US DOJ Anti-Trust Division, ten of its officers and senior managers, including the owner and CEO Scott Salyer, were indicted for, and plead guilty to, charges relating to racketeering, money laundering, anti-trust, food misbranding and food adulteration.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f6ad608b-2cc8-42fd-8c6c-1c8ab89c5498", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.658, "x": 0.196, "y": 0.156 }, "kind": "quote", "text": "SK Foods routinely falsified the lab test results for its tomato paste... ordered employees... to falsify tomato paste grading factor, and... lied about its product’s percentage of natural tomato soluble solids, mold count, production date, and whether the tomato paste qualified as “organic.”", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "00f2d0bc-5dea-4b5a-8fdc-257cbcea73bf", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.658, "x": 0.196, "y": 0.412 }, "kind": "quote", "text": "We pack garbage for them anyway and they always take it, but we’ve hit new lows.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "87255ad7-ed72-46de-ba75-85b68b46d6bd", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"SK Foods routinely falsified the lab test results for its tomato paste... ordered employees... to falsify tomato paste grading factor, and... lied about its product’s percentage of natural tomato soluble solids, mold count, production date, and whether the tomato paste qualified as 'organic.'\" — US Department of Justice; \"We pack garbage for them anyway and they always take it, but we’ve hit new lows.\" — Randall Lee Rahal, Director of SK Foods.", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-25b3-7229-befc-d880deb165a1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.708, "x": 0.146, "y": 0.764 }, "kind": "source-note", "text": "88-91 Footnotes detailing legal proceedings and news reports.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fba9d85c-6232-497b-bda0-52ab1f19c93f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.387, "x": 0.146, "y": 0.66 }, "kind": "title", "text": "Others Looked, Olam Leapt", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b7f53b1c-91d7-4b58-bf55-5783fdb400c8", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 133, "from": 51, "beatId": "bfd56f27-9e0e-4a96-9fda-8bd5736531bb", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Victory", "beatSlug": "overcoming-monster-the-victory", "evidence": "Conclusion and recovery analysis", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }