Zhang Jimin, chairman of West China Cement, is caught in a war of words with US short seller Glaucus Research Group that threatens to upset the Chinese company's deal with Italy-listed firm Italcementi Group.
On Wednesday, Glaucus posted on its website a report alleging West China Cement, a cement producer headquartered in Xian, the capital of Shaanxi province, was 'a blatant fraud'.
Glaucus' report listed a series of accusations against the Hong Kong-listed firm, including suspicion over its allegedly expensive acquisition of 65 per cent of loss-making Shaanxi cement producer Shifeng Cement.
Shifeng is involved in a 504 million yuan (HK$617.63 million) deal between Italcementi, the world's fifth-largest cement producer, and West China Cement, which was finalised on June 28 with the central government's approval.
Under this deal, Italcementi sold its 35 per cent stake in Shifeng and other mainland Chinese cement plants in return for a 6.25 per cent stake in West China Cement, becoming the third-largest shareholder of the Chinese company.
On Thursday, Zhang held a press conference in Hong Kong denying Glaucus' allegations, while West China Cement issued an announcement rebutting Glaucus' claims, point by point.