US short seller Hindenburg Research has charged Israeli geothermal energy company Ormat Technologies Inc. (NYSE: ORA; TASE: ORA with "widespread and systematic acts of international corruption."
In a report entitled "Dirty dealings in clean energy," Hindenburg claims that Ormat has been involved in corrupt operations in Guatemala, Honduras and Kenya and estimates that corrupt projects contributed nearly 70% of Ormat's 2020 revenue. Hindenburg claims to have uncovered direct evidence linking Ormat to corruption in Guatemala.
The short seller relies heavily on the close ties between Ormat and Shikun & Binui Holdings Ltd. (TASE: SKBN) where former senior executives are being indicted in Israel for corruption, as evidence of wrongdoing. The report points out that Ormat CEO Doron Blachar is a former CFO of Shikun & Binui, and rather vaguely adds, "It is unclear whether Blachar faces near-term risk of indictment," although there has been no suggestion by the authorities that he will be indicted.
After rising sharply in 2020, Ormat's share price has fallen 30% since the start of 2021. But today's report by Hindenberg seems to have had little impact with Ormat's share price currently down 0.04% on the NYSE at $85.63, giving a market cap of $4.8 billion.
Published by Globes, Israel business news - en.globes.co.il - on March 1, 2021
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