Aug. 26 (Bloomberg) -- China Minzhong Food Corp. slumped by the most on record after short-seller Glaucus Research Group accused the vegetable producer of “significantly deceiving” regulators and investors about the scale of its business.
Minzhong shares were halted in Singapore at 53 Singapore cents, down 48 percent, after tumbling as much as 51 percent, the most since the company’s listing in April 2010. Short interest in Minzhong, which has become the latest target of Glaucus, rose to a record 7.2 percent of the outstanding stock on Aug. 19 from this year’s low of 3.8 percent in March, according to the most recent data from research company Markit Group Ltd.
“Publicly available filings indicate that Minzhong fabricated sales figures to its top two customers,” according to the report from Glaucus today. “Corporate registry records show that a Taiwan-based food distributor, which was supposedly Minzhong’s largest customer in the pre-IPO track record period between 2007 and 2009, was only incorporated in November 2009, suggesting, in our view, that Minzhong simply fabricated the sales figures in its prospectus.”
“The company is consulting its legal team and will comment on the report as soon as possible,” Travis Seet, a Minzhong spokesman at the company’s Putian headquarters in China’s Fujian province, said by telephone.
China Metal Recycling Holdings Ltd. and China Medical Technologies Inc. have each separately been the focus of reports by Glaucus, which claims to “help investors navigate treacherous financial waters in search of great investment opportunities,” according to a statement on the home page of its website. Liquidators were appointed to China Metal in July and China Medical filed for Chapter 15 foreign-firm bankruptcy protection in New York last year.
Six of the seven analysts covering Minzhong recommend investors buy the stock, while one rates the stock a hold, Bloomberg data show.
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