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Rural Funds Group (ASX: RFF) founder David Bryant has purchased almost $500,000 worth of shares in the wake of a fresh attack from short seller Bonitas Research.
Led by one of the men who was responsible for the short on Blue Sky Alternative Investments (ASX: BLA) in 2018, late last week the Texan group stood by its position on the Australian farmland owner.
RFF expressed vindication on 27 August after Ernst & Young released a report claiming Bonitas' allegations were unsubstantiated, albeit whilst clarifying its report was not the result of an audit.
Bonitas took RFF to task over this fact, alleging the report had "backfired", was not a "clean bill of health" and did not refute its allegations.
"While RFF shouts victory, we think the EY Report backfired on RFF by highlighting that RFF Management's fair value calculations included an "incorrect application of AASB 116" specific to RFF's bearer plants and "identified inconsistencies" specific to RFF's water entitlement assets," the short seller said.
"In RFF Management's hasty approach to convince the market that our allegations were untrue, RFF made a mistake and revealed how RFF eluded PwC's audit oversight to include fabricated profits and net asset values in its reported Financial Statements."
On 6 September, RFF's responsible entity Rural Fund Management (RFM) responded by reiterating its stance from 8 August that it would not provide further detailed responses to any existing, or possible future, allegations made by Bonitas.
"A third document has today been released by Bonitas which is deliberately misleading and is again designed for Bonitas and those behind it, to make financial gain, to the detriment of other RFF security holders," RFM said.
"RFM advises that legal counsel have been briefed on the matter and proceedings in the Supreme Court of New South Wales will be commenced imminently.
"RFM will rely on the findings of the Supreme Court of New South Wales as the most authoritative response to the Document."
Just as he did in the wake of the initial attack, RFF founder and RFM managing director David Bryant purchased shares in RFF to the tune of $497,263. This compares to an acquisition of $499,912 in August when shares were still trading much lower.
At the same time, Japanese multinational Sumitomo Mitsui appears to have viewed the RFF share price fall as a buying opportunity, becoming a substantial holder with a 5.02 per cent stake in the company.
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