Fairfax Financial Holdings has responded to a damning Muddy Waters Research report, saying it does not agree with the online research publication’s pronouncements.
Muddy Waters Research, a producer of due diligence-based reports on publicly traded securities, released a 72-page report on Thursday that called Fairfax “the GE of Canada” – GE was known to have misled investors through disclosure violations, as found by the US Securities and Exchange Commission.
In its report, Muddy Waters Research said: “We find that Fairfax has consistently manipulated asset values and income by engaging in often value-destructive transactions to produce accounting gains… We see Fairfax as far more akin to GE than to Berkshire Hathaway.”
Fairfax has since issued a response, stating: “Muddy Waters Research issued a report regarding Fairfax Financial Holdings Limited suggesting that the book value of Fairfax was overstated.
“Fairfax disagrees with the allegations and insinuations contained in the report, and would like to assure all shareholders that Fairfax has prepared its financial statements and reporting in accordance with all applicable accounting principles.”
The company, which is releasing its 2023 financial results on February 15, went on to highlight that it “achieved record earnings” in the first nine months of last year due to record operating income.
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