Short-sell specialist compares Macquarie to Enron

| 5/29/2007

A well-known Wall Street investor who warned of the collapse of Enron Corp. before it happened says toll-road investor Macquarie is showing some of the same trouble signs.

Jim Chanos, president of Kynikos Associates, says he believes Macquarie Bank of Australia is paying too much for assets – including toll roads in the U.S. and around the world – and that has led to inflated stock prices and too much off-balance-sheet financing, Bloomberg News reported.

Macquarie Bank’s infrastructure offshoot, Macquarie Infrastructure Group, makes up half of the consortium that leased the Indiana Toll Road for $3.85 billion in 2006. Along with Cintra of Spain, Macquarie also has 45-percent interest in the $1.83-billion lease of the Chicago Skyway.

Chanos mentioned Macquarie to investors as a possible “short-sell” at a medical research conference last week, Bloomberg reported.

Chanos’ company, Kynikos, specializes in short selling, which is buying stocks believed to be inflated, allowing them to fall, and selling them back to the previous investor at the original price.

Macquarie officials have blasted back, saying their business model is sound. Macquarie CEO Allan Moss told ABC News in Australia that the company’s model is “shock proof.”