Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

New Oriental Jumps on Committee for Muddy Waters’s Claims

July 20 (Bloomberg) -- New Oriental Education & Technology Group Inc. rallied for a second day after forming an independent committee to review allegations raised by short seller Muddy Waters LLC about the Chinese company’s accounting practices.

The American depositary receipts of New Oriental jumped 15 percent to $12.91 in New York, extending a two-day gain to 36 percent. The rebound followed a 35 percent slump on July 18 as Muddy Waters questioned the ownership of some of New Oriental’s schools and the consolidation of their financial statements with the parent company.

The Beijing-based educational services provider, known as EDU, said it formed a special committee comprised of three independent directors to conduct a review of the allegations. It aims “to provide the highest level of transparency to its shareholders,” according to its statement today.

“EDU provided a more detailed response and addressed additional allegations via a conference call last night,” Jeffrey Meuler, an analyst at Robert W Baird & Co., wrote in a note to clients today. “The management said they were not aware of the report until this Wednesday, and therefore EDU is still in the process of gathering and analyzing data.”

New Oriental, responding to Muddy Waters’s allegations in a statement yesterday, said it owned 664 schools and learning centers at the end of May as previously disclosed and that 21 third-party operated “cooperation facilities” and their students were never counted as the company’s.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.