Fairfax Financial Holdings Accounting Row: Fairfax Financial’s Prem Watsa says fewer than 20 companies in the country have a track record like ours.
Fairfax has invested $7 billion in India.
“We are neither Berkshire Hathaway nor GE, as Muddy Waters said,” said Watsa, whose huge success as an investor has earned him the nickname Canada’s Warren Buffett.
Muddy Waters claimed that Fairfax was “Canada’s GE” rather than Berkshire Hathaway, and issued a report on February 8 that found Fairfax’s stock price had fallen 12 per cent. The stock halved its losses in early trading in Toronto on Feb. 12. Muddy Waters’ comments about GE relate to the company’s 2020 settlement of a $200 million fine from U.S. stock market regulators over alleged accounting violations.
“Over 38 years, our book value per share has increased by 18.9% and our stock price has grown by 18% per year. Of the 6,000 companies listed in the United States in 1985, fewer than 20 have a similar track record,” Watsa strongly states. I retorted. Short seller’s argument.
Fairfax owns several companies in India, including Thomas Cook, CSB Bank, Bangalore International Airport, Quess Corp and Digit Insurance. Fairfax said the short-selling allegations were ‘false and misleading’. “Muddy Waters never attended our conference call and never asked a question. , called us or sent us letters, but instead went to CNBC during our quiet period with one-sided and ill-informed claims and insinuations in a transparent attempt to profit by shorting our stock,” Fairfax said in a statement. said in
Meanwhile, shares of Thomas Cook, CSB Bank and Quess Corp, all listed Fairfax Group companies in India, recorded losses between 2 and 6 per cent in trading on Monday.
Muddy Waters alleged that Fairfax, which has total assets of $84 billion primarily comprised of corporate investments, inflated the fair value of certain investments to increase its book value by $4.5 billion.
It also claimed that Fairfax’s investment in India-listed Quess Corp was assigned fair value on its books at 87% higher than the company’s share price in September 2023. It was claimed that this led to nominal and accounting profits for the parent company. Increased book value.
Fairfax plans to hold a conference during its earnings call on February 16 to answer questions related to the allegations.
(You can now subscribe to ETMarkets WhatsApp channel)
Download the Economic Times news app to get daily market updates and real-time business news.
Subscribe to The Economic Times Prime and read Economic Times ePaper Online and Sensex Today.
Top trending stocks: SBI stock price, Axis Bank stock price, HDFC Bank stock price, Infosys stock price, Wipro stock price, NTPC stock price.
