China Minzhong Says Glaucus Misunderstands Its Business Model
China Minzhong Food Corp. (MINZ) said a report by short-seller Glaucus Research Group that questioned its accounts completely misunderstood the food processor’s business model.
“Most of the issues raised by Glaucus with regard to the financials of the company were nothing new and arose out of a complete lack of understanding of the company’s business model as well as the operating environment in China,” China Minzhong said today in a statement.
China Minzhong, which this week lost half its market value after Glaucus published the report, is preparing a full response that will show its financials are sound, the company said. Its shares will remain suspended until 5 p.m. Singapore time on Aug. 30.
Glaucus’s report said that the Putian, China-based company had been “significantly deceiving” regulators and investors, sending the stock 48 percent lower and wiping off S$318 million ($249 million) in market value before trading was suspended.
Minzhong shares were halted at 53 Singapore cents, after tumbling the most since the company’s listing in April 2010. Short interest in the vegetable processor 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.
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