Asia / Oceania
West China Cement denies fraud claims, shares fall 16 percent
Aug, 09 2012
(West China) -- Shares in mainland cement maker West China Cement Ltd (2233.HK) fell as much as 16 percent on Thursday following a report by a U.S.-based short-seller accusing the firm of fabricating its financial statements.
West China Cement, the latest Chinese company to be targeted by short-sellers, said the report by California-based Glaucus Research Group was groundless and was based on inaccurate data.
"The report adopted a very general approach to its analysis of the group's bank balance and this is clearly misleading," the company said.
West China Cement, which had a market value of $774 million before trading began, closed down 1.5 percent on Wednesday morning ahead of a trading suspension. The stock was last down 8.5 percent at HK$1.19 at 0138 GMT.
Deloitte Touche Tohmatsu, which was appointed earlier this year as the auditor for West China Cement, was closely monitoring developments, Deloitte China said.
A spate of accounting scandals at U.S.-listed Chinese companies has made auditors more alert to the risk of financial irregularities and the consequences for them if they're found to be negligent.
Glaucus Research was not immediately available to comment.
Italian cement maker Italcementi (ITAI.MI) agreed in May to acquire a 6.25 percent stake in West China Cement as the group moved to strengthen its position in the world's largest building materials market.
Earlier this week, shares of Nu Skin Enterprises Inc (NUS.N) fell as much as 12 percent after short-seller Citron Research published a report alleging that the personal-care products maker was operating an illegal multi-level marketing scheme in China.
Nu Skin said in a statement that its China operations were in compliance with local regulations.
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