(Reuters) – Laboratory testing firm Eurofins on Tuesday rejected allegations made a day earlier by short seller Muddy Waters (NYSE:) that questioned its financial statements and hit its shares, saying it was confident in its accounts and operations.
Muddy Waters said Monday it had taken a short position in Eurofins shares and issued a report saying Eurofins’ financial statements may contain material overstatements of earnings, cash balances and the value of other assets.
“In the opinion of Eurofins, all allegations and insinuations contained herein are either inaccurate, inappropriate, biased and/or misleading,” the firm said in a statement.
Eurofins has “full confidence in the integrity of its accounts, operational performance, internal controls and risk management,” it said.
Founded in 1987 by current CEO Gilles Martin, Eurofins offers laboratory testing services to industries such as pharmaceuticals, food and cosmetics and has received support during the pandemic.
Responding to one of the allegations contained in the short seller’s report, Eurofins said that all real estate transactions with related parties were made “at arm’s length” and “all buildings were paid for by the owner.”
The company added that its cash amounts were audited both locally and at a consolidated level, with all necessary communications between the accounting teams and auditors.
It said it would provide a detailed response “in due course” and would work with its auditors to prepare further analysis as needed.
Eurofins shares, which lost 25% on Monday, rose 4.7% to 46.3 euros as of 0730 GMT on Tuesday.
They closed at €52.7 on Friday ahead of the Muddy Waters report.