France’s main professional organisation for the finance industry has found itself at the centre of a spat between activist short seller Muddy Waters and under-fire outsourcer Solutions 30, according to documents seen by FT Alphaville.
Société Française des Analystes Financiers, a 60-year old organisation with over 1,600 individuals as members, was due to host Muddy Waters’ Carson Block for a fireside chat on June 30. Block, whose firm was short Solutions 30 between 2019 and May this year, was to discuss regulatory lessons in light of EY refusing to sign off on the outsourcer’s accounts in late May. Just before the event was due to take place, however, it was suddenly postponed without explanation.
FT Alphaville has found out why. On June 21, SFAF chairman Thierry Giami was sent a formal letter by Paris-based law firm August Debouzy on behalf of Solutions 30. The letter stated that the trade body would face “legal consequences” from the “public dissemination” of comments that could damage the stricken outsourcer, and that it reserved “our right to act with regards to the consequences, in particular legal consequences” from any defamatory statements.
SFAF told FT Alphaville it had found “it inappropriate to organise a meeting, with an audience larger than its members, a few hours after the General Assembly of Solution 30” and that it was still interested in hosting Block.
SFAF said it had “reiterated its invitation, for September.” The group declined to comment on the letter, the existence of which it had originally denied.
Solutions 30 has been in a battle with Muddy Waters since December when, following the publication of an anonymous short report, Block followed up with a series of pointed letters on the firm’s alleged ties with organised crime in Eastern Europe. The €820m market cap Luxembourg-domiciled firm said it refuted the allegations and, in January, filed a complaint with French financial regulator the AMF and the national prosecutor’s office over what it characterised as “false and misleading information and market manipulation”.
There’s been little news of the complaints since, except for Solutions 30 chief executive Gianbeppi Fortis’ comments on a April 29 conference call that it was “closely cooperating with market authorities, both in France and in Luxembourg”.
In a statement to FT Alphaville, Solutions 30 said August Debouzy advised it send the letter to “defend itself or to respond to possible new attacks” and “to inform the organisers of all the contextual elements — complaints, unfounded accusations, virulent attacks — ahead of the event”, particularly as it was due to be held so close to the firm’s annual general meeting. August Debouzy did not respond to a request for comment.
Despite Solutions 30 being a Luxembourgish guest on Paris’ listed markets, we’d be surprised if the AMF wasn’t watching how this one plays out closely. After all, if a guest isn’t acting politely, it’s the hosts obligation to do something about it.
Solutions 30: from Romania to Mauritius, with love — FT Alphaville
Solutions 30: a €1.1bn question mark — FT Alphaville
Solutions 30 and the disappearing audit letter — FT Alphaville
Solutions 30’s stock craters after EY refuse to sign off on accounts — FT Alphaville