Timminco Limited is suing fund manager Ravi Sood and his firm Lawrence Asset Management because of the following statement made by Sood on Business News Network in April:
There is no evidence that they have any sort of proprietary technology. There is no evidence that they can actually deliver on their claims.
Timminco is a leader in the production and marketing of lightweight metals, specializing in solar grade silicon for the rapidly growing solar photovoltaic energy industry. Using its proprietary technology, Timminco processes metallurgical grade silicon into low cost solar grade silicon for use in the manufacture of solar cells. Timminco also produces silicon metal, magnesium extrusions and other specialty metals for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.
And so Timminco is suing, seeking C$6 million in damages in their lawsuit filed in Ontario Superiod Court. They say that Sood is trying to drive down the price of the company’s shares with his statement.
The company’s stock traded Tuesday at C$30.60, with a 52-week low of C$3.43. Media reports say industry insiders are skeptical of its claimed proprietary technology and its claimed ability to make its products at a lower cost than competitors. Timminco makes solar-grade silicon, which has had shortages and cost increases. No other company has been able to do what Timminco claims it can do, and Timminco has been very secretive, which apparently fuels the skepticism.
Ethan Zindler of New Energy Finance said the following about the lawsuit:
My feeling is that if you’re a highly speculative company with a speculative technology, it would seem to me that you don’t have a whole lot to complain about if some people think what do you won’t work. If people are betting that you and your technology will work, you would seem to open yourself up to people that might have the other opinion.
So basically, Timminco needs to put up or shut up. Don’t be such babies about someone criticizing your claimed technology and claimed capabilities when none of it has been proven. Was Sood incorrect when he said the technology hasn’t been proven? I think not. It seems he was right on point with that.
But this isn’t the first or last company that is trying to shut up critics. Overstock.com (NASDAQ:OSTK), CEO Patrick Byrne, and in-house cyberstalker Judd Bagley are notorious for harassing and intimidating critics of the company’s business methods and financial reporting.
This is also no different than the Biovail lawsuit against Gradient Analytics for a negative (and completely accurate) report Gradient put out about the company. Oh, and Overstock sued Gradient too for saying that their crappy company is, indeed crappy.
Companies are trying to intimidate those who criticize their businesses and their financial reporting. I just want to know when companies are going to start suing people who say false positive things about them. Fair is fair.
http://businessopinions.blogspot.com/2008/06/timminco-suing-short-seller-for-libel.html
Truth is an absolute defence in a libel suit. Clearly Sood is as confident in his assertions as Timminco is in their position. I expect that the legal foofrah is going to be endlessly entertaining!
And so it goes … companies that resort to suing critics are usually deserving of criticism. Allied Capital suing David Einhorn is another good example.
Lee – technically truth is not a defense. The burden is on the plaintiff to prove falsity. At least that is how it is in most states. Furthermore, even a layperson such as myself can tell that such a general statement about there being ‘no evidence’ is not libelous; furthermore, the widespread public criticism of Timminco ensures that the company and its executives are ‘public persons’ in the eyes of the law and thus have to prove actual malice (I think that’s the legal term) on the part of the critic, not just falsity.
(I am not a defamation lawyer or any lawyer and my previous statements should be taken only as opinions and not as legal advice. Sadly, though, I do have a good defamation lawyer on retainer, as every critic of a public company should.)
Put up or shut up works both ways. What has Ravi Sood put on the table to prove that Timminco can’t deliver on their promises? Seriously he has to have some evidence before he can state that Timminco has no evidence.
Timminco has put up their part. Customers are happy with their product, Photon consulting report shows that Timminco has something thats an industry changer. People have toured the plant. What else do you want?
It has nothing to do with them being babies. When someone compares your company to BRE-X then the shit starts hitting the fan and you fight back. I say its a warranted move on Timminco’s part to sue.
check out http://www.asensio.com he has been following Timminco for quite a while now.
He just said there is no evidence. Why don’t they show the evidence, if it exists?