Alternative lender Callidus Capital Corp. is forcefully denying a media report that regulators and police are probing the company's business after whistleblowers came forward to allege the company is engaged in fraud.

The company, the lending arm of private equity firm Catalyst Capital Group Inc., trades on the TSX and saw its shares lose more than a fifth of their value on Wednesday after the Wall Street Journal reported that at least four unnamed individuals have filed whistleblower complaints with the Ontario Securities Commission.

Shares of Callidus fell Wednesday by $3.28 to close at $12.06. The stock shed another 23 cents, finishing at $11.83 on Thursday. 

Callidus, which loans money to financially distressed firms, is alleged by whistleblowers of artificially inflating the value of some of its assets and deceiving borrowers about the terms of loans, the Journal reported.

In a press release, Callidus said it "knows of no legitimate basis for any whisteblower complaint."

"Callidus believes that those individuals [who made the complaints], having failed in court, are filing deliberately misleading whistleblower reports with the OSC so that they can then leak them to the press in the hope that the press will publish the allegations," the company said.

"As a result, the media and public markets are misled and the legitimate OSC 'whistleblower' process is exploited for personal advantage, and to do damage to the market value of Callidus, and to the reputation, operations and investments of its majority shareholder, Catalyst," the firm said.

The OSC's whistleblower program began in 2016, and it offers up to $5 million in compensation to individuals who provide tips that lead to enforcement action by the provincial regulator.

Callidus was due to report its second-quarter earnings and host a conference call following the close of stock markets on Thursday.