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Canadian Insurer Fairfax Denies Allegations of Asset Worth Manipulation

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Fairfax Monetary on Monday denied allegations by Muddy Waters Analysis that the Canadian insurer was manipulating asset values, saying the short-seller’s report was “false and deceptive.”

The detailed counter comes days after the corporate’s temporary preliminary response to the report wherein Muddy Waters had accused Fairfax of typically partaking in “worth damaging transactions” to provide accounting positive factors.

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Fairfax mentioned Muddy Waters neither referred to as it nor wrote to it, and as an alternative launched the report throughout its quiet interval with its “one-sided, ill-informed allegations and insinuations in a clear try to revenue by quick promoting our inventory.”

Muddy Waters Shorts Canada Insurer Fairfax Financial, Alleging Asset Value Manipulation

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Publicly traded corporations are usually subjected to a quiet interval of some weeks previous to reporting their quarterly outcomes. They’re prohibited from discussing materials monetary data throughout this era.

Toronto-based Fairfax is about to report its fourth-quarter outcomes on Thursday.

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“They’ve woefully misjudged the power of Fairfax’s financials and prospects and we’re assured {the marketplace} will mirror our robust fundamentals,” Fairfax mentioned.

Brief sellers earn cash by betting that the worth of a inventory will lower. Shares of Fairfax slipped 11.9% after the report was launched final Thursday, however recouped a few of their losses a day later.

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“We stay up for a substantive response from Fairfax that really addresses our findings,” Muddy Waters mentioned in an emailed assertion to Reuters.

Based in 1985 by Canadian-Indian billionaire Prem Watsa, who is called “Canada’s Warren Buffett,” Fairfax is engaged in property and casualty insurance coverage and reinsurance, by its subsidiaries.

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Muddy Waters had mentioned in its report final week Fairfax “was much more akin to GE than to Berkshire Hathaway.”

“We’re neither Berkshire Hathaway, nor GE, as Muddy Waters suggests. We’re Fairfax, a powerful and enduring firm constructed over 38 years,” Watsa mentioned in a press release on Monday.

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(Reporting by Arasu Kannagi Basil in Bengaluru; modifying by Shilpi Majumdar)

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Carriers
Canada

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