Italian biotechnology company Bio-On Co. has file a lawsuit is seeking legal remedy for the injury to its reputation brought about by the “false and misleading” news spread by U.S. asset management firm Quintessential Capital Management (QCM) about the Bologna-based company.
The move comes following a damning report by the New York-based firm July 19, stating that Bio-On was “a house of cards, a scheme conceived by management to enrich themselves on at the expense of shareholders”.
In an Aug. 5 statement, Bio-On said it had filed a complaint with the Public Prosecutor of Bologna in relation to the claims made by QCM.
The company also notified The Italian Companies and Exchange Commission (CONSOB), the Italian authority for regulating securities, stating that QCM’s conduct constituted “a clear case of market abuse," involving “market manipulation” and “criminal insider trading.”
QCM noted in its report that it "has an economic interest in the price movement of the securities mentioned in this report," which typically means the firm has a short position in the stock.
“QCM has in fact spread false and misleading news, solely aimed at causing the value of Bio-On stock to collapse, having already assumed — as QCM has explicitly stated — an investment position linked to this downturn,” said the Bio-On statement.
The company stated that the ‘clearly false and denigratory’ QCM report contained:
(i) information that could objectively be established as being false;
(ii) information based on incorrect assumptions or, in any case, communicated to the market in a misleading manner;
(iii) true information, easily obtainable from Bio-on corporate documentation, presented as the results of an alleged inquiry carried out by QCM.
Bio-On is commercializing polyhydroxyalkanoate (PHA) resins, a biodegradable polyester made by bacterial fermentation of sugar.
The company has confirmed that its Bologna-area plant "is fully operative and active in PHA production," in contrast to the QCM report, which questioned the status of the plant.
In the light of the above, Bio-On is confident that the Italian authorities will seek feedback on the information provided by QCM “with all due haste” and help "restore" the reputation of “this severely maligned company.”
