The Rural Funds Group (ASX: RFF) share price could be extremely volatile today after it gave a response to the short seller attack by Bonitas Research.

Rural Funds Group is a real estate investment trust (REIT) that owns farms and leases them to tenants. Started in 1997, Rural Funds Management (the manager) now manages $1.2 billion in agricultural assets across New South Wales, Queensland, South Australia and Victoria.

Rural Funds’ Response To Bonitas Research

After the market had shut Rural Funds issued a rebuttal.

First, Rural Funds said that the short report was issued without any inquiry of Rural Funds Group or Rural Funds Management (RFM). Rural Funds also pointed out that Bonitas has a short interest and stands to significantly profit if its shares fall.

Rural Funds said: “RFM rejects entirely the unfounded allegations of financial impropriety and irregularity contained in the Document and is obtaining legal advice in respect of those matters. Notwithstanding, given the seriousness of the matters raised and the resultant adverse effect on the price of RFF securities, RFM has engaged Ernst & Young to independently investigate matters raised and assess RFM’s refection of each of the claims made in the Document as set out below.”

As you may be able to guess, Rural Funds then went on to say for most of Bonitas’ points, “This statement is incorrect” with further denials.

However, Rural Funds did explain that there was one error in the notes:

The RFF 31 December 2018 accounts contained a table formatting error in Note E2, p31. The table incorrectly lists a loan to the 2007 Macgrove Project of $14.463 million. The correct figure is $0.008 million. This error is confined to this table only and does not flow through to, or alter, the accuracy of RFF’s 31 December 2018 Financial Statements.”

Rural Funds will also be holding a webinar at 9AM in response to the document, with a recording to be made available on the RFM website.

It’s hard to say who is right until at least Ernst & Young has finished with its audit. It will be interesting to see if the Rural Funds report is released according to the scheduled date in this reporting season.

It might be better to think about the reliable shares in the free report below instead until this is resolved one way or another.


Finding ASX shares offering exceptional long term growth and dividends over 3% is rare. Our expert investors have just released a FREE investing report which reveals proven ASX shares.

These three companies have proven themselves to be reliable dividend + growth shares over a decade. Click here to get instant access to the investing report -- updated September 2019.

Absolutely no credit card details or payment required.

Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

Disclosure: Jaz owns shares of Rural Funds at the time of writing, but this could change at any time.