Olam International shares rebounded Thursday, recouping some of the losses in previous sessions as Singapore state investment fund Temasek said it was keeping its 16 percent stake in the farm commodities trader.
Muddy Waters Research, a US-based shortseller, had sent the stock plunging after it warned that the Singapore-based Olam was in danger of collapsing like US energy trader Enron.
Olam shares closed four percent higher at Sg$1.56, but analysts warned of further volatility.
Despite the gains, the stock is still down 10 percent since Carson Block, the influential founder of Muddy Waters, told an investment conference in London on November 19 that he was betting against the company.
Muddy Waters on Tuesday released a 133-page report supporting Block's criticism of Olam's accounting practices, debt levels and business model.
Olam fired back with a 45-page rebuttal on Wednesday and its chief executive Sunny Verghese followed it up with a conference call with the media and analysts in which he thanked Temasek for its support.
"The fact that they have stayed invested and kept the faith is the biggest support I can ask for," he said.
He added that the support was significant because the objective of Muddy Waters "was to really create fear and panic amongst key stakeholders".
Temasek spokesman Stephen Forshaw confirmed to AFP on Thursday that "we have maintained our position in Olam".
Temasek is the second biggest investor after the KC Group, an Asian-African company that holds a nearly 20 percent stake in Olam, which began operations in 1989 as a cashew exporter in Nigeria.
Olam reported Sg$403.8 million ($331 million) in profits after tax on sales revenues of Sg$17.1 billion in its 2012 financial year that ended in June.
Verghese told Dow Jones Newswires on Thursday that Olam will "recalibrate" its strategy and spread its investments if needed.
"We clearly believe that our strategy is right and that's evidenced by the fact that over the last 23 years we have built market-leading positions in many of our platforms," he said.
Analysts said Olam's detailed rebuttal of the allegations by Muddy Waters Research also helped calm investors.
"The worst is over but sentiment could remain subdued as investors remain cautious," analysts from Malaysian bank CIMB said in a note.
"We think the saga could have arisen from a misinterpretation of Olam's financials, much of which has since been clarified."
Olam now sources products including cocoa, coffee, sesame, rice, and cotton from 65 countries and supplies them to more than 11,600 customers.