Olam International's shares continued to slide Wednesday despite its rebuttal of a research firm's warning that the Singapore farm commodities giant could collapse like US energy trader Enron.
"Olam faces no risk of insolvency. We have proactively planned for an appropriate capital structure and raised the requisite equity and debt to meet our investment plans," it said in a posting to the Singapore Exchange.
"We have sufficient liquidity to pursue our current business as well as future investment plans," it said, adding that its accounting practices, also called into question, fully adhere to Singapore's standards.
The statement was issued following a temporary trading halt sought by Olam after Muddy Waters, a US-based firm founded by influential short-seller Carson Block, released a scathing 133-page report on Tuesday.
Olam shares dropped further on Wednesday despite its vehement 45-page response, closing at Sg$1.50, down 3.85 percent. The fall is on top of the stock's 6.0 percent decline on Tuesday.
The Muddy Waters report was released despite a libel suit launched by Olam in Singapore's High Court following Block's remarks at a London business conference last week that Olam was in danger of collapse.
Olam said Wednesday that the report was aimed at creating investor panic and enabling "Carson Block and his associates to benefit from their short positions in Olam securities -- a strategy of shouting fire in a crowded room".
In its report, Muddy Waters said Olam faced a "significant risk" of default and likened it to Enron, which failed in 2001 amid government probes into its accounting practices -- one of the biggest scandals in US corporate history.
Olam, which reported sales revenues of Sg$17.1 billion ($14 billion) in its 2012 financial year, accused Muddy Waters on Wednesday of taking facts out of context and described its conclusions as "without merit".
Justin Harper, an analyst with IG Markets Singapore, said in the tiff so far between Olam and Muddy Waters "the biggest winner is Muddy Waters which has achieved huge amounts of coverage for its attack on Olam as Carson Block looks to raise his profile as the scourge of Asian corporations".
But he added that "while he could have raised some valid points of concern to ponder, the finger-pointing comes across as driven by self-promotion rather than genuine concern for Olam shareholders."
Olam, which started out 23 years ago in Nigeria, sources products including cocoa, coffee, cashew, sesame and rice from 65 countries and supplies them to more than 11,600 customers.
Singapore's state investment firm Temasek Holdings is one of Olam's biggest shareholders, owning a 16 percent stake as of March 31.