(Boursier.com) — As in the first attack on Gotham City Research on June 22, the management of SES Imagotag issued a press release following the second round of accusations against it which fell on Friday morning. “False and deliberately misleading accusations”, according to the listed company, which also speaks of “numerous and gross inaccuracies which have the sole purpose of manipulating and profiting from a possible drop in the share price.”
The company confirms that it has notified the Autorité des Marchés Financiers of the many breaches committed by Gotham City to its regulations and filed a complaint today with the National Financial Prosecutor’s Office, in particular for the dissemination of false and misleading information. If it does not go into the details of the accusations, the company indicates that it will publish in the coming days an “equally complete and detailed rebuttal of this second publication”.
Indeed, the hedge fund published a second report on Friday questioning SES-imagotag. After going after the electronic label specialist for alleged “misleading, incorrect and incomplete” accounts and various irregularities, the short seller this time targets the general management and the board of directors whom he considers “suspicious” in reason of “serious misconduct and conflicts of interest”. He cites in particular the case of a property in Austria where the R&D center of SES-imagotag operates and which would be owned by the members of the management: “in other words, SESL is the tenant of the Austrian installation, the members of management, the owner, and all such material and undisclosed related party transactions.”
In addition, Gotham City asserts that “5 directors qualified as independent, including 2 out of 3 audit committee members, do not appear to be independent because they are heavily invested alongside management through SESIM, an illiquid structure that owns shares SESL… Worse yet, management’s much-vaunted share purchase in November 2022 was actually funded by pledging existing shares (i.e. borrowing) through SESIM.”
Finally, the fund reaffirms that it has identified “numerous accounting irregularities” in its various reports: “we believe that SES-Imagotag’s financial reports, including its cash balances, are suspect and/or materially incorrect, and that its annual reports recent years will have to be retired”.
In huge volumes, the title SES-imagotag ended Friday with a gain of 31.60%. It continues its rise of 2.4% more modestly to 119 euros on Monday… According to Portzamparc, “the content of the new accusations from Gotham remains in the continuity of the first press release deemed disproportionate and misleading. The rebound of the title reflects the relief of certain investors and redemptions of short positions which should continue” according to the analyst who remains buyer on the file by targeting a price of 187.50 euros.