March 8, 2020 / 5:52 PM / a month ago

Brazil's XP founder denies short-seller accusations

SAO PAULO, March 8 (Reuters) - Brazilian broker XP’s founder, Guilherme Benchimol, denied on Sunday the accusations made by a short-seller that caused shares to fall on Friday.

Benchimol said in a post on his Instagram account that the “serious accusations” are baseless and that the company went through due diligence of four law firms and two auditors to conclude its initial public offering in the United States.

In a formal response posted on XP’s investor relations website, the company says the report is “full of errors” and demonstrates a lack of knowledge about the different accounting rules demanded by the Brazilian Central Bank and IFRS – international financial reporting standards. XP also says the investor makes inappropriate comparisons using financial reports of different XP entities.

Shares in XP plunged on Friday after the release of the short-seller report by financial research firm the Winkler Group.

Reporting by Tatiana Bautzer; Editing by Lisa Shumaker

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