The Globe and Mail reports in its Friday, Feb. 9, edition that U.S. short-seller Muddy Waters Research alleges Fairfax Financial Holdings has overstated its balance sheet by $4.5-billion (U.S.) in part by failing to adequately write down a series of bad investments. The Globe's David Milstead writes that Muddy Waters flagged transactions or accounting choices involving 13 Fairfax investments, subsidiaries or joint ventures, each of which had a positive impact on the balance sheet of $100-million (U.S.) or more. Four of the investments Muddy Waters attacks involve transactions with the Ontario Municipal Employees Retirement System. Muddy Waters also questioned how Fairfax implemented a recent insurance industry accounting standard, IFRS 17, saying it obtained far better results than typical property and casualty insurers. Muddy Waters says 60 per cent of the increase in Fairfax's book value since 2017 "is the product of abusive accounting often from value destructive, non-substantive transactions." The book value, the excess of a company's assets over its liabilities, is overstated by 18 per cent, Muddy Waters argues. Fairfax said it "disagrees with the allegations and insinuations contained in the report."