CPI Property says short seller Muddy Waters took facts 'out of context'

Cpi Property SA

08/12/2023 19:51

NEW YORK, Dec 8 (Reuters) - Luxembourg-based commercial
landlord CPI Property Group (CPIPG)  O5G.DE  said on Friday that
short-seller Muddy Waters painted "a misleading picture" of the
company "by taking facts out of context."
    On Nov. 21, a key bond of CPI Property fell by the most on
record after Muddy Waters said it had bet against the credit of
the company, which owns properties in Germany, the Czech
Republic, Poland and elsewhere in Central and Eastern Europe.
        The short-seller alleged in a report that CPI Property's
controlling shareholder, Czech billionaire Radovan Vitek, had
misstated the value of the landlord. It also said some income
had been booked against real estate properties that were in fact
empty plots of land.
    "CPIPG has never obscured our relationship with Radovan
Vitek, his family, or any other related parties," the company
said in a presentation on Friday reviewed by Reuters. It stated
some transactions it engaged in are "complex," but that there is
no conflict of interest there.
    The real estate company also said that law firm White & Case
LLP will conduct a "fresh review" of its compliance, governance
and related party transactions. On Nov. 30 CPI Property said it
had started an internal audit and engaged a law firm to review
the company's governance procedures, compliance policies and
allegations raised by Muddy Waters.
    The price of CPI Property's 2027 medium-term note has not
yet fully recovered since Muddy Waters' report was published,
although shares in CPI Property have recovered initial losses
and are up 3.3% since Nov. 21.
    Muddy Waters' report detailed four transactions totaling
about 441 million euros ($474.38 million) in which it said the
cash and real estate accounts "could be misstated" and inflated.
    "Muddy Waters went on a fishing expedition, recycling themes
that have proven successful for them in the past," CPI Property
wrote in its presentation. 


($1 = 0.9296 euros)

 (Reporting by Carolina Mandl; Editing by Susan Fenton)
 ((carolina.mandl@thomsonreuters.com; +1 (917) 891-4931;))