China's Evergrande denies short-seller's report

[June 21, 2012]  HONG KONG (AP) -- Chinese property developer Evergrande Real Estate Group denied on Thursday a short-seller's research report accusing it of accounting tricks and bribes to hide insolvency. The developer's shares were down nearly 10 percent in Hong Kong.

Evergrande said in a brief statement to the Hong Kong stock exchange that it would make a further clarification announcement "in due course."

The company, one of China's largest property developers, was responding to a Citron Research report released the day before.

The report accused Evergrande of using fraudulent accounting, overstating its cash, inflating the value of its assets and underreporting the cost of land. Citron also said Evergrande's chairman has bogus credentials.

Citron, based in the U.S., publishes reports online about companies it believes are misleading investors and bets their share prices will fall. The firm has released reports with similar allegations on more than a dozen other Chinese companies.

Evergrande shares were down 9.8 percent at HK$4.04 in Hong Kong trading.

Chinese companies, many traded in the U.S., have over the past year been involved in a spate of scandals involving accounting irregularities.

Most notably, Sino-Forest Corp. filed for bankruptcy last year after being accused by Muddy Waters Research of overstating its timber holdings in China.

[Associated Press]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.