Muddy Waters LLC, the research firm founded by short-seller Carson Block, hired lawyers in Singapore to act in the lawsuit by the world’s second-largest rice trader Olam International Ltd.
Jason Lim and Goh Kok Yeow from De Souza Lim & Goh LLP were appointed Dec. 24, according to filings in the Singapore High Court case where Olam sued Block and Muddy Waters after Block questioned Olam’s accounting methods and said it “will fail” at a conference in London on Nov. 19.
Olam, which raised $712.5 million last week from a bond sale backed by its second-largest shareholder Singapore state investment firm Temasek Holdings Pte, sought unspecified damages and costs in its lawsuit, which was delivered to Muddy Waters’ Los Angeles office last month.
“Olam has a good arguable case,” Ipsita Aggarwal, general counsel at the company, said in a Nov. 29 court filing requesting to serve the lawsuit on Muddy Waters and Block outside Singapore. “The words are clearly defamatory to Olam, as further evidenced by amongst others the negative market reaction immediately following the publication of the words.’
Lim declined to comment on the lawsuit. Zach Kouwe, an external spokesman for Muddy Waters, declined to comment on the significance of the lawyers’ appointment. Olam spokesman Aditya Renjen didn’t reply to an e-mail seeking comment.
Block, a 36-year-old former lawyer, first said on Nov. 19 that he was selling Olam shares short -- borrowing them to profit by buying them at a lower price later. He told Bloomberg Television on Nov. 27, after issuing his report on Olam, that Muddy Waters is always prepared to defend all its reports in court.
Olam’s bonds and shares sank in November after being targeted by Block. Olam shares rose 0.3 percent to S$1.645 as of 1:30 p.m. in Singapore trading. The stock is down 5.2 percent since Block’s initial comments on Nov. 19.
The case is Olam International Ltd. v Muddy Waters LLC, Carson Block. S987/2012. Singapore High Court.