Solutions 30 S30
EY's refusal to sign Solutions 30's 2020 audit — after S30 blocked access to information on suspect transactions — confirms Muddy Waters' two-year-old fraud and money-laundering thesis.
Thesis
Muddy Waters has been short Solutions 30 (S30) since May 2019 and frames this eighth communication around EY's May 2021 refusal to issue an audit opinion on S30's 2020 financials. EY stated it could not obtain sufficient evidence on the nature, substance, value and legality of certain transactions and that S30 impeded the audit, language Muddy Waters reads as confirmation of likely fraud and money laundering. The note attacks supervisory board chairman Alexander Sator and CEO Gianbeppi Fortis for misrepresenting prior limited reviews by Didier Kling and Deloitte as exonerating 'audits.' Block names sell-side analysts at Genesta and Berenberg, plus fund managers at Comgest, Swedbank Robur and Franklin Templeton, who added to S30 positions despite the red flags, and draws an explicit Wirecard analogy about European credulousness toward fraud.
SCQA
Solutions 30, a €1.1bn-cap European technical-services firm, had been touting Didier Kling and Deloitte 'reviews' as audits that fully rejected Muddy Waters' two-year-old fraud allegations.
EY refused to sign the 2020 audit, saying S30 blocked access to information on transactions whose nature, substance, value and legality — including possible related-party dealings with management — could not be verified.
Regulators should open a well-resourced enforcement investigation likely to yield sanctions or criminal prosecutions; sell-side analysts and fund managers holding S30 should reassess their positions and ratings.
Vindication of the short thesis: with the stock halted at a €1.1bn market cap on the back of an unsigned audit, exposure of the underlying fraud implies substantial further downside toward zero.
The three reasons
- 1
EY refused to sign 2020 audit, citing potentially material and pervasive misstatements
- 2
S30 impeded EY's audit, unlike the controllable scopes of DK and Deloitte reviews
- 3
S30 misrepresented limited reviews as 'audits' that 'fully rejected' fraud allegations
Primary demands
- Regulatory enforcement investigation into S30
- Sanctions proceedings or criminal prosecutions against management
- Sell-side analysts and fund managers should reassess Buy ratings and positions
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Sino-Forest 2011 self-exonerating interim report
- Wirecard / Heike Pauls sell-side episode
Notable slides (3)
Notes
Eighth installment in Muddy Waters' multi-year short campaign on Solutions 30. Word-style memo (text-only, footnotes, no charts) reacting to EY's May 2021 refusal to sign S30's 2020 audit. Carson Block authored (footnote 7). Notable rhetorical moves: 'locked door' adultery analogy as cold open; explicit Wirecard and Sino-Forest analogues; naming-and-shaming of sell-side analysts (Raphaëlle Poulain/Genesta, Remi Grenu/Berenberg) and buy-side PMs at Comgest, Swedbank Robur and Franklin Templeton. No new valuation work or price target — this is a narrative/credibility piece reinforcing the prior fraud thesis.