{ "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": 92, "pageCount": 133, "prevPage": 91, "nextPage": 93, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "The slide uses a narrative structure to draw parallels between Enron's past behavior and Olam's current actions, specifically highlighting the contradiction between public ethical posturing and private misconduct.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-063645a867ac/92", "deckHref": "/decks/019dd923-622c-750b-8b96-063645a867ac", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-063645a867ac.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-063645a867ac#slide-92", "components": [ { "bbox": null, "kind": "callout", "text": "One of the truisms we have found in business and life is that the louder one states he is ethical, the less likely that is to be true.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-25b3-7229-beff-224ebf5c1158", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.72, "x": 0.14, "y": 0.75 }, "kind": "paragraph", "text": "Olam frequently states that it is improving the lives of farmers, employees, and others in the developing world - its website prominently features a ten-page “Livelihood Charter” that describes Olam’s efforts to improve the lives of rural communities in the developing world. Olam publishes an annual “Sustainability Report” - the 2012 version is 42 pages long. Yet, there are newspaper and non-governmental organization reports alleging various abuses by Olam, including being a “Congo-trashing company” by engaging in illegal logging and land grabs; failing to pay taxes; corrupting", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0ad030cf-1657-49fd-8822-9d669086b810", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.72, "x": 0.14, "y": 0.67 }, "kind": "paragraph", "text": "Enron’s hypocrisy is clear. It had a 62-page code of ethics it gave to employees - at the same time it was manipulating energy markets to cause blackouts in California, burning billions of dollars of investor funds, and committing accounting fraud.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "32e9e9b9-c31d-4a6d-acf9-0a8cd3d12400", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.28, "w": 0.72, "x": 0.14, "y": 0.3 }, "kind": "paragraph", "text": "We now have a first hand perspective on how deep Olam’s antipathy toward critics goes. Olam has purportedly filed suit against Muddy Waters and Carson Block for the 15-minute talk on Olam he gave on November 19, 2012 at the Ira Sohn conference in London. According to articles, the suit includes a request for an injunction against further public discussion of Olam. There are several examples of better known investors discussing in greater length and detail (and who released slides) discussing negative theses on companies they are short at Ira Sohn and similar conferences. They have seldom - if ever - drawn lawsuits from these companies. Yet it apparently took Olam all of three days to file a suit. During the past week, Olam has had two conference calls, and has been very active in the media attempting to impugn our credibility - despite it evidently having little idea what Mr. Block said or thinks. Olam is hardly the picture of confidence. It is clear to us that it desperately wants to prevent us from releasing our research. Oh well.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8a1921a6-9184-4910-9826-f6efe7bb6395", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.72, "x": 0.14, "y": 0.59 }, "kind": "paragraph", "text": "Both companies prided themselves on being ethical companies. One of the truisms we have found in business and life is that the louder one states he is ethical, the less likely that is to be true. Truly upstanding people and companies generally let their actions speak for themselves.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9ec7e48d-deda-455e-b0e4-aad0d59df6cc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.72, "x": 0.14, "y": 0.11 }, "kind": "paragraph", "text": "Both Enron and, in our view, Olam betrayed their substantial insecurity in their reactions to critics. Jeff Skilling famously called a presumed short seller an “asshole” on a conference call after the investor questioned why Enron was always unable to produce a balance sheet with its earnings announcement. When a former CLSA analyst published a report in February 2011 criticizing Olam’s accounting practices, the Company publicly responded forcefully, despite having a policy of not commenting on analyst coverage. The analyst left CLSA soon thereafter. (As we discuss in this report, we believe that the response did not sufficiently address the analyst’s concerns.)", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f1ca76df-e974-4121-99b1-3ebfdd3ec2cc", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "Jeff Skilling famously called a presumed short seller an “asshole” on a conference call after the investor questioned why Enron was always unable to produce a balance sheet with its earnings announcement.", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-25b3-7229-beff-273bc121b35a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.88 }, "kind": "source-note", "text": "171-177 footnotes detailing sources for claims.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "dc2d774b-f559-4a20-acbf-5ebc3e7350b3", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "expose_contradiction", "slug": null, "matchId": "2fd54f28-e6b5-425b-bbed-098c7359396a", "evidence": "The text explicitly contrasts the companies' public ethical claims with their alleged misconduct.", "confidence": 0.9 } ], "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 }