PARIS (Reuters) – Eurofins Scientific shares fell sharply on the stock market on Monday, after a note published by the American hedge fund Muddy Waters which accused the French group of scientific laboratories of financial irregularities.
On the Paris Stock Exchange, around 09:05 GMT, Eurofins fell by 22.9% to 40.68 euros, heading towards its biggest session decline in 24 years. Trading of the stock had previously been suspended for around forty minutes.
Muddy Waters, who recommends a short position on the stock, points out that Eurofins has, in recent years, raised and then consumed billions of dollars intended to finance its growth. “At best, Eurofins has a parasitic controlling shareholder who has been siphoning money from the company for two decades. We believe, however, that Eurofins’ account statements could contain significant overstatements of profits, cash balances and other asset values,” the hedge fund said.
“Eurofins is optimized for malfeasance. We don’t know exactly how deep the rot goes, but we suspect it extends to reporting on revenue, profits, cash and other asset accounts “, concludes Muddy Waters.
Eurofins did not immediately respond to a request for comment. Reuters was not immediately able to verify the allegations in the report.
(Written by Augustin Turpin with Olivier Sorgho, edited by Blandine Hénault)
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