A war of words has erupted between short seller Viceroy Research and Labour MP Liam Byrne this weekend after he suggested the firm had ties to the Kremlin.
In a parliamentary debate last month, the MP for Birmingham Hodge Hill called for an investigation into “the activities of short-selling attack group Viceroy Research and its leader Fraser Perring”, adding that Perring was “not an infrequent visitor to Moscow”.
“We must ensure that short-selling groups are not another weapon in Putin’s arsenal,” he said.
Byrne further alleged that Viceroy and activist investor Boatman Capital had worked “hand in glove” to short defence firm Babcock international and suggested the pair had now “targeted” scandal-stricken social housing firm Home REIT.
However, Viceroy and Boatman have both hit back at Byrne’s claims this weekend and demanded he retract them.
In a letter to Byrne seen by City A.M., Perring’s lawyers said he had “never been to Moscow” and the “imputation conveyed by this false statement is highly damaging”.
“Furthermore, neither our client nor Viceroy Research have ‘targeted’ Home REIT,” lawyers for Perring wrote.
“Rather, they have been looking into the company and produced a report which raised questions and exposed the company’s failures, which have resulted in losses to investors, including pension funds, and to the public purse.”
The lawyers also rejected suggestions that Perring had ever been involved in the short selling attack on Babcock.
Writing on Twitter, Perring called Byrne “scum” and claimed to have filed a Met Police complaint against him.
Viceroy shorted former FTSE250 firm Home REIT and sounded the alarm over its business model in November, triggering a collapse in its share price and string of scandals.
Boatman meanwhile is a shareholder in Home REIT and has been agitating for a change in its board. The pair are on ‘opposite sides of the trade’, meaning that Boatman will profit from a rise in its share price, while Perring’s outfit reaped major returns from the sharp fall in shares before they were suspended in early January.
A letter from the Boatman to Byrne, seen by City A.M. described the allegations as “ludicrous” and said the firms had never worked together.
“You describe short sellers as “another weapon in Putin’s arsenal”. This is nonsense,” the Boatman Capital wrote.
“If Putin’s strategy to undermine the UK is the shorting of a poorly performing property investment trust, the Russian president is in more trouble than anyone realised.”
Boatman shorted Babcock and published reports on the firm in 2018 and 2019 but said it had done so because it was “concerned about the company’s mismanagement and its habit of burying bad news”.
A spokesperson for Byrne declined to comment or offer any further evidence to support his initial claims.