Swiss core banking vendor Temenos has hit back at Hindenburg Research, insisting that the damning report published yesterday by the activist investment firm contains "factual inaccuracies" and "false and misleading allegations".
Shares in Temenos closed down 28.2% at 63.5 Swiss francs on Thursday after Hindenburg published its report following a four-month investigation.
Says Temenos in a statement: "The report contains factual inaccuracies and analytical errors, together with false and misleading allegations, which are intended to adversely impact the Company’s share price."
The firm says it "refutes" the Hindenburg report but does not provide details on what the errors or false allegations are. It will issue its audited results for the year ended 31 December on 19 February that are in line with pre-results outlined in January.
"The Company is confident in the strength of its business, financial performance and cash position," says the statement.
Hindenburg claims to have uncovered hallmarks of manipulated earnings and major accounting irregularities.
"This includes evidence of roundtripped revenue, sham partnerships, rampant pulling forward of contract renewals, backdated contracts, excessive capitalization of seemingly non-existent R&D investments, and other classic accounting red flags."
The activist investment firm points to a string of failed product installations, and irregular licencing agreements allegedly intended to help the vendor hit its yearly targets.
"These aggressive accounting practices seemed to be an open secret among many of the former employees we spoke with," writes Hindenburg. "Several indicated that CEO Andreas Andreades encourages the practices, which help gloss over significant customer product dissatisfaction and attrition."