Wednesday, June 04, 2008

Timminco Suing Short Seller For Libel

Forensic Accountant and professional fraudbuster Tracy Coenan has a blog post about legal action Canadian metallurgical company Timminco has taken against a fund manager who has publicly called them out.

Timminco Limited is suing fund manager Ravi Sood and his firm Lawrence Asset Management because of the following statement made by Sood on Business News Network in April:
"There is no evidence that they have any sort of proprietary technology. There is no evidence that they can actually deliver on their claims."

So basically, Timminco needs to put up or shut up. Don’t be such babies about someone criticizing your claimed technology and claimed capabilities when none of it has been proven. Was Sood incorrect when he said the technology hasn’t been proven? I think not. It seems he was right on point with that

It's seldom a good sign when companies immediately lawyer up in the face of investor skepticism. As the saying goes, "where there's smoke, there's fire." Some of the companies that Tracy mentions who've had a history of suing critics, such as Biovail and also have a history of financial under performance.

It will be interesting to see how Timminco vs. Lawrence Asset Management plays out, both in court and in the press.

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1 comment:

Independent Accountant said...

My experience is the same. If they have the technology, they will show it to everyone. If the company contacts its lawyers, its probably a good short sale.