China’s Tianhe denies overstating profits, cites investor support
Tianhe Chemicals (1619.HK) has denied allegations that it made false statements in its initial public offering prospectus and said key investor Morgan Stanley Private Equity Asia (MSPEA) has given it full support.
A report by Anonymous Analytics, which describes itself as a “faction” of the hacker group Anonymous, accused the Chinese chemicals company of conducting “one of the largest stock market frauds ever conceived,” based on analyses of different company reports, tax statements, market analysis and visits to customers mentioned in Tianhe filings.
It also accused Tianhe of giving its auditor Deloitte forged documentation prior to its IPO in Hong Kong in June, an allegation Tianhe denied in a statement on Wednesday.
Deloitte declined to comment when contacted by Reuters, referring Reuters to Tianhe’s statement.
Tianhe’s share price fell 5 percent in just a few hours on Sept 2, after the Anonymous report was published. Tianhe management requested a trading halt, while Goldman Sachs and UBS suspended their ratings on the stock.
The cost of borrowing shortable shares in Tianhe, which had a market cap of just under $8 billion before the trading halt, has risen since the freeze, indicating the report has gained some market traction.
Tianhe said it “unequivocally denies and vigorously refutes the groundless allegations in the report” but added that trading in its shares will remain suspended while it addresses queries from the Hong Kong stock exchange.
“Resumption of trading of the shares may only take place when all relevant information has been provided to the stock exchange and properly disclosed.”
It also said that its e-mail system had been hacked.
Source: Reuters
