NY-listed Qihoo 360 denies hyping usage, revenue numbers
A New York-listed Chinese internet company has denied claims that it inflated its internet usage data and revenue.
The allegations were levied against Qihoo 360 Technology by Anonymous Analytics, a network of anonymous investigators that claims to be linked to Anonymous, a loose group of computer hackers purporting to promote political transparency.
'Qihoo's traffic volume is the reason the company has reported revenue growth of 200 per cent per year in the last three years,' Anonymous Analytics said.
'The only problem is that Qihoo's massive traffic volume is a lie.'
Qihoo, headquartered in Beijing, offers internet and mobile security products to protect users' computers and mobile devices against malware and malicious websites.
Qihoo describes itself as one of the top three internet companies in China as measured by user base, with 411 million active internet users at the end of March.
In the first quarter, Qihoo's revenue jumped 202 per cent to US$69.3 million while its net profit was US$14.1 million, compared with a net loss of US$21.4 million in the first quarter last year, according to its website.
Founded in 2005, Qihoo listed on the New York Stock Exchange on March 30 last year, with UBS and Citigroup as its underwriters. On July 3, its market capitalisation stood at US$1.96 billion.
Anonymous Analytics also accused Qihoo chief executive and co-founder Zhou Hongyi (pictured) of unethical behaviour when he was CEO of Yahoo China before joining Qihoo in 2006. In 2007, Yahoo China won an unfair competition lawsuit in a mainland court against a company previously controlled by Zhou.
Qihoo denied all the claims.
'This is a false allegation that was also raised by previous short-seller groups and we have rejected all claims as false in the past and still maintain that all allegations are false. Our position remains unchanged,' a Qihoo spokesman said.
Previously, articles in Forbes questioned Qihoo's accounts while websites such as American short-seller Citron Research and Deloitte-Watch, which is not associated with the accounting firm, accused Qihoo of fraud.
In April, Qihoo 'strongly rejected' the allegations in the Forbes article.
The Qihoo spokesman said that the company's 2011 annual results were audited by 'top auditing firm' Deloitte Touche Tohmatsu.
'We stand by all the financial data that we provide,' the Qihoo spokesman said.
Earlier, Anonymous Analytics accused Hong Kong-listed Chaoda Modern Agriculture Holdings of manipulating its accounts.
In May, BDO resigned as Chaoda's auditor, citing its concern that the mainland agriculture firm had not fully addressed Anonymous Analytics' allegations.