Viceroy Research has reiterated its belief that Swedish industrial technology group Hexagon insiders ran a ‘‘fraudulent’’ scheme to enrich themselves at the expense of public shareholders after seeing its short report rebuked.
Last Wednesday, Viceroy alleged that Hexagon’s top managers have front-run company investments through a vehicle called Greenbridge. It also claimed that the company’s historic organic growth is the result of mischaracterization and ‘‘blatant’’ misreporting, and that a ‘‘vast number’’ of businesses bought by Hexagon over the years are underperforming.
In a statement Sunday, Greenbridge refuted “several false and defamatory claims” made by the short seller against it and declared it only shares one investment with Hexagon, adding that this was made after the industrial technology group invested in that business. Greenbridge also pushed back against allegations of undisclosed related party transactions and ‘’hidden’’ investments.
However, Viceroy said on Monday that it still believes Hexagon Chair Ola Rollén and other insiders have used Greenbridge to take an ‘‘unjust advantage’’ at the expense of shareholders, which the short seller labeled as fraud. Viceroy insisted Hexagon has major governance issues that should be seen as ‘‘enormous’’ red flags by investors.
Hexagon shares were up 1.8% at 115.50 Swedish kronor each as of 11:23 a.m. Wednesday in Stockholm. They were trading close to 113 last week before Viceroy’s original report.