Posted on Dec 11, 2019 2020 at 8:35
There was an anonymous report on Wednesday accusing Solutions 30 of mafia links and accounting errors. And now there’s Muddy Waters, asking the company questions publicly.
No, the famous activist is not the author of the anonymous report, no, he was not informed beforehand of its publication. But he had to study the company, because since May 2019, he has continued to be a short seller on this stock.
For Carson Block, founder of Muddy Waters, “ Solutions 30’s responses (given by press release, Editor’s note) sometimes contain inaccuracies and omit facts that we believe should be disclosed to avoid misleading investors “.
Questions to Solutions 30
Consequently, the activist, who in 2015 pointed to the high debt of Rallye, the parent company of Casino, decided to ask several questions to the leaders of Solutions 30. The latter are due to hold a meeting with investors this Friday. organized by broker Berenberg. He hopes that answers can be provided.
Among the points Muddy Waters discusses, Solutions 30’s links with the Mafia. “Do you think Angelo Zito was associated with the Mafia at some point? Do you confirm that the information we have, according to which Angelo Zito served time in prison, is incorrect? “Muddy Waters indeed believes he knows that the former manager of an accounting firm in Luxembourg, the Fiduciaire du Kiem with which the company, which has its headquarters in Luxembourg, has been working,” charged, convicted and served in prison ”.
The activist also notes that in April 2016, just after the release of an article in an Italian newspaper on Angelo Zito and his alleged links with the Mafia, Solutions 30 changed accountants. Despite everything, the company remained linked to Angelo Zito. “It seems to us that you tried to cover up your ties with Angelo Zito, but without cutting them. Were you and Solutions unable to find a suitable auditor in Luxembourg who was not related to Angelo Zito? “Asks the activist.
Muddy Waters reportedly saw other links between Solutions 30 and Angelo Zito, namely a couple who worked for Angelo Zito at the Fiduciaire du Kiem. One of them, the husband, would have partially managed Aurore Invest, a hedge fund. The latter would have sold, in 2018 to Solutions 30, 3% of CPCP Télécoms, one of the large subsidiaries of Solutions 30. Muddy Waters would like to know the price of this acquisition.
Finally, while Solutions 30 has declared that buying empty shells as subsidiaries is a normal practice, Muddy Waters questions the creation of some and asks for more specific answers.
Since the release of the anonymous report, Solutions 30, the favorite value of small and mid-cap funds, has already fallen by nearly 26%. In recent days, around 13% of the capital has been sold short, notably by a hegde fund, Gladstone Capital Management.