Marc Cohodes isn’t through with waging his own personal war against Home Capital Group. The independent short-seller, who fires volley after volley from his home base on a Northern California chicken farm, is sticking to his guns and refusing to unwind his bets against the mortgage lender in spite of the company telling investors doubts about its ability to continue as a going concern are now in the rearview mirror.

In an interview on BNN, Cohodes, who has been short the stock since it traded above $50 a share, reiterated his unproven allegations of wide-ranging fraud at the company.

“When the final chapter is written … Home Cap will be revealed as one of North America’s great corporate fraud, lack of disclosure, un-shareholder friendly companies out there,” Cohodes recently said in a conversation before the lender reported a larger loss than expected this week.

On Wednesday, Home Capital Group (HCG.TO) said it swung to a $111.1-million loss in the second quarter, as its bottom line was weighed down by $213.6 million in pre-tax costs associated with a liquidity crisis earlier this year that pushed it to the brink.

Home Capital has aimed to quell fears about its long-term viability - declaring in its quarterly report that the extreme uncertainty surrounding its future has been “resolved.”

The company has repeatedly and strenuously denied all of Cohodes’ allegations, and said on the second-quarter conference call that it has bolstered its quality control and income verification systems in an effort to avert another bout of income fraud, which was at the root of the crisis of confidence that enveloped the company earlier this year.

The company’s newfound confidence in its survival is in no small part due to a lifeline tossed to it by the Oracle of Omaha.

A subsidiary of Warren Buffett’s Berkshire Hathaway (BRKa.N) stepped up for Home Capital in late June, taking a 19.99 per cent stake in the firm for $153 million dollars, and could end up owning 38.39 per cent of the company if shareholders approve an additional investment in September. The deal netted Berkshire a substantial discount to the market price of the stock. Berkshire also replaced Home Capital’s onerous line of credit with the Healthcare of Ontario Pension Plan as part of the deal, albeit at an only slightly-lower interest rate.

Cohodes is suspicious of the terms that brought Buffett into the game, alleging a number of factors including Berkshire’s lack of a board seat suggest backdoor dealings were at play.

“I think Warren’s in for a loan-sharking deal,” he said.

“My cynical approach is, he cut a deal with the [federal] government which buys him a seat at the table for some big deal he will do in Canada somewhere down the line. That’s my prediction. My prediction is that Warren Buffett will get a sweetheart deal to do other Canadian investments with a pat on the back from the Canadian government.”

Finance Minister Bill Morneau told BNN he spoke with Buffett in Seattle in the days before the investment was made, and that while they didn’t speak specifically about the Home Capital situation, discussions were had about the overall state and stability of the domestic housing market.

In spite of the stabilization in liquidity and a recovery in its share price, Home Capital said it won’t know exactly where the company will function in the lending market for at least six months, but Cohodes said he doesn’t believe the company will make any money if business continues as usual.

“I think if they run this thing like a legitimate outfit, the company will not make any money,” he said. “I think their loan-loss provisions will go through the roof.”

Home Capital declined to comment on any of Cohodes’ comments when contacted by BNN. There has never been any evidence of wider fraud at the company after the OSC alleged Home Capital and three of its former executives misled investors in 2015. A tentative settlement has been reached between the regulator and the accused, with a confirmation hearing scheduled for Aug. 9.  

Cohodes said polite Canadian mores make for a situation where unscrupulous behaviour can potentially go unchecked for years at a time, as he thinks Canadians are unwilling to rock the boat even if they suspect or even witness something untoward.

“People in Canada, 99 per cent of them, are god-fearing righteous people who know right from wrong, and I call them the ‘kitten-and-rainbow crowd,’” he said. “They see wrong-doing, they just don’t know what to do, but they don’t like speaking out because they’re scared to speak out for [fear of] retaliation. I’m not scared.”