Shares in Hong Kong-listed Winsway Coking Coal continued to fall further yesterday despite the company's dismissal of a research firm's allegations that it had engaged in fraud.
A 10-page report by Jonestown Research accused the mainland firm of falsifying its accounts and said it had 'every reason to want its stock price to go down'.
Winsway's shares plunged 5.8 per cent to HK$1.8 yesterday, following a drop of 8.6 per cent on Thursday. The Hang Seng Index climbed 0.84 per cent yesterday.
The company, which imports Mongolian coking coal to China, made its market debut in 2010 with a value of HK$7.2 billion.
Winsway said nothing in the Jonestown report had been substantiated, and reassured investors that a proposed C$1 billion (HK$7.7 billion) takeover of Grande Cache Coal was still on track.
Toronto-listed Grand Cache, which owns leases containing more than 300 million tonnes of coal in the Smoky River coal field in Alberta, agreed in October to be bought by Winsway and Marubeni, a Japanese trading house.
'Grande Cache Coal has no reason to believe there is any merit to the allegations made in a report recently issued by Jonestown Research in respect of Winsway and has been assured by Winsway that the report is entirely without merit,' Grand Cache said in a statement.