Glaucus eyes Hong Kong, Singapore stocks after China Metal Recycling success
Stocks in Hong Kong and Singapore were Glaucus' primary focus because of the cities' rule of law and level of transparency and limited opportunities in the United States and Europe, Glaucus' director of research, Soren Aandahl, told the South China Morning Post.
Californian-based short seller Glaucus says it is focusing on stocks listed in Hong Kong and Singapore for the next six months after unveiling alleged fraud at China Metal Recycling (CMR).
Stocks in the two markets were Glaucus' primary focus because of the cities' rule of law and level of transparency and limited opportunities in the United States and Europe, Glaucus' director of research, Soren Aandahl, told the South China Morning Post.
The short seller alleged in a report in January that CMR, the mainland's largest scrap metal recycler, cooked its books.
The Securities and Futures Commission last month exercised its statutory power to apply to have CMR wound up. The company has been put in provisional liquidation. Its founding chairman, Jacky Chun Chi-wai, is contesting the winding-up petition.
Aandahl said CMR came under Glaucus' attention in May last year after it found the company's revenue per employee to be unbelievable, its chief financial officer to have left the company a few months after its listing in 2009, and its chairman to be selling his shares in the firm.
"It's not rocket science," he said. "We worked out our thesis based on public information and haven't travelled to the mainland to do inspections or sought any advice from management."