25th Apr 2014 08:52
LONDON (Alliance News) - Quindell PLC Friday continued to reject claims made in a report from Gotham City Research LLC as "highly defamatory" and "deliberately misrepresentative", noting that Gotham City took short positions on Quindell's shares before publishing the report.
The software and consulting services company said it had taken legal action in what "it believes to be a coordinated shorting attack", and is reporting the activity to the appropriate regulatory authorities.
Quindell noted that the 74-page report from Gotham admitted that readers should "assume that, as of the publication date of the report, Gotham City Research LLC stands to profit in the event the issuer's stock declines."
Quindell is continuing to work with its advisers, and expects to post a further response later Friday.
Gotham City's report said that it was unable to reconcile 42%-80% of Quindell's profits, stating that they are suspect as they are explained by sales to related parties owned and operated by Quindell Chief Executive Officer Robert Terry.
"Many low quality companies and outright frauds have historically entered the public markets via reverse merger," Gotham City said in the report.
Claims included in the note are that "Quindell's New York office does not seem to exist" and that, until 2008-2009, it was "little more than a country club run by Robert Terry" that started reporting "exceptional margins just in time for its public listing".
Shares in Quindell were trading down 5.3% at 23.67 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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