Shares in core banking provider Temenos have increased following the release of an investigation commissioned by the company, which concluded that the accusations of mismanagement raised by short seller Hindenburg Research were “inaccurate and misleading.”
Hindenburg’s claims emerged in February, when the US-based activist investor shorted Temenos stocks, alleging “accounting irregularities, failed products, and an elusive turnaround.” These allegations were backed by a report that Hindenburg produced in February, which involved interviews with 25 former Temenos executives. As a result, Temenos’s share price dropped by 25% on the day the report was published.
In response, an independent inquiry was undertaken by a special committee established by the Temenos board and led by executive chairman Thibault de Tersant. The committee received support from two law firms, Schellenberg Wittmer and Sullivan & Cromwell, as well as forensic accountants from Alvarez & Marsal Switzerland.
Temenos reported that the committee had unrestricted access to company executives and all relevant documents, including communications and records. The review involved an analysis of more than 300,000 documents and electronic communications, alongside interviews with 17 current and former employees.
The committee’s findings indicated that Hindenburg Research had made “incorrect and misleading allegations about Temenos and its accounting, products, and customer relationships, presenting purported facts in a distorted manner or out of context,” as stated by Temenos.
The results of this investigation were positively received by the Temenos chairman. Thibault de Tersant remarked, “The report has found that Hindenburg’s Research’s allegations were inaccurate and misleading. It clearly reinforces the Board’s view that Temenos is running a sound business, offering best-in-class products, and has robust financial controls and strong governance oversight. Temenos remains fully focused on servicing its clients and building relationships with its partners.”
Additionally, Temenos expressed plans to appoint a new CEO ahead of its shareholder meeting in early May, following the departure of former CEO Max Chuard in January 2023 under investor pressure.
Hindenburg Research has not yet responded to the findings of the recent review.