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  "documentTitle": "Olam International Ltd. (SGX:O32)",
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  "authorName": "Carson Block",
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  "presentationDate": "2012-11-27 00:00:00",
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      "text": "Olam has produced some of the worst accounting gaffes we’ve ever seen—often surpassing the US-listed China RTO frauds.",
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      "text": "Olam has produced some of the worst accounting gaffes we’ve ever seen—often surpassing the US-listed China RTO frauds. At the very least, these numerous accounting problems over the years strongly suggest that Olam’s accounting functions are incompetent. It is hard to understand how Olam can be an effective risk manager when looking at the confusion it has had over its accounts. Moreover, some of the accounting revisions are so unusual as to suggest irregularities.",
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      "text": "On the other hand, Olam’s non-acquisition CapEx has become massive. We cannot account for cumulative S$996.2 million in booked (but unattributed) CapEx over the last four years. Olam has so far failed to release information allowing us to bridge this gap.",
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      "text": "The truly interesting aspect of Olam’s CapEx is that it seems to spend less cash on acquisitions than perceived; but, it spends much more on non-acquisition CapEx than investors understand. This implicates various possibilities, including the possibility that Olam is pursuing more greenfield projects than investors realize. If true, that fact would alter Olam’s risk profile. Another potential issue is the specter of poor internal controls and substantial cash leakage.",
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      "text": "Olam’s snowballing CapEx appears to be destroying significant investor value, and pushing the company toward collapse. Olam tells investors that its CapEx projects are creating long-term value, and are generally meeting their targets while they are gestating. On the back of these statements, Olam borrows more money for more projects. Given Olam’s true CapEx track record, Olam reminds us of a degenerate gambler, losing money only to borrow more from friends and family; and, then doubling down, losing again, borrowing more, and so on.",
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      "text": "financial models makes clear that they have no idea how Olam’s financial statements work, based on widely varying estimates for virtually every model input. The Company publicly admits that its business is difficult to understand. Good things seldom come of investing in something one does not understand – particularly when there is a high degree of leverage.",
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      "text": "The total acquisition consideration Olam has announced exceeds disclosed cash consideration payments by S$571 million. Yet investors and analysts are often unaware when a project has died or been put on indefinite hold.",
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      "text": "15 http://www.ft.com/intl/cms/s/0/baae8bc-33ba-11e2-9ae7-00144feabdc0.html#axzz2DLeWvu3B\n16 See Acquisitions: All Hat, No Cattle\n17 See Non-Acquisition Capital Expenditures—So Black Holes Do Exist!",
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      "text": "Olam’s CapEx is Off the Rails",
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