Intertain presses ahead with investigation into alleged short-seller activity

Canadian online gambling group Intertain has wasted no time in setting up an independent investigating committee to look into allegations of misleading reportage and short selling by Spruce Point (see previous report).

The committee, which consists of non-management directors David Danziger, Stan Dunford and Mark Redmond, in conjunction with the committee’s independent advisors has already furnished a preliminary update as work continues, claiming to have already discovered inaccuracies in the Spruce Point report of December 17 that could have contributed to the dramatic fall in Intertain’s share price.

The committee’s brief is to evaluate the information that the short seller disseminated after it, and its affiliates, had established a short position in the Intertain’s common shares, which provided them with a significant financial self-interest in precipitating a decline in the company’s share price.

The Board of Directors has requested a thorough review of the report in order to ensure that the marketplace has the most accurate information possible and that the company responds appropriately to the report. Irrespective of the source of the information, the committee will exercise its authority to fully review the matter.

In a statement Wednesday, the committee informed shareholders that, even at this initial stage of its review, it has become clear that the short seller’s report contains “numerous factual inaccuracies and mischaracterizations of data.”

Once the committee’s work is complete, Intertain will publicly disclose the outcome of the review, and the company will take all actions necessary and appropriate to protect its interests and those of its shareholders. Intertain says it does not intend to comment further on these matters until the committee’s review has concluded.

Intertain has advised investors not to rely on the short seller’s report pending the completion of the committee’s review.