KE Holdings, which is backed by SoftBank Group and Tencent Holdings and is China’s largest online property agency , has refuted a claim of “significant” fraud made by US-based short-seller Muddy Waters Research . The New York Stock Exchange-listed company, which is also known as Beike Zhaofang, was compared with disgraced Chinese start-up Luckin Coffee by Muddy Waters, which said on Thursday that KE had inflated new home sales by more than 126 per cent and commission revenue by between 77 and 96 per cent. The short seller also said the transaction volume and the number of stores and agents reported to investors had “massive discrepancies”. “Similar to Luckin Coffee , this is a real business with significant amounts of fraud,” the short-seller said in its report. KE’s 1.8 billion yuan (US$282.6 million) acquisition of Zhonghuan Real Estate Agency had served as a way to funnel money to management through a proxy connected to them, according to Muddy Waters. “Beike ensures the authenticity of its financials and that they are in line with regulations,” KE said in a statement on Thursday night. It added that it welcomed all investigations, but would “boycott any vicious short-selling activity by any institution”. The fraud claims by Muddy Waters come at a difficult time for KE, which has seen its share price decline 70 per cent this year. The company faces mounting regulatory pressure in both China and the US. In China, regulators were closely examining the variable interest entity structure of Chinese firms and tightening their grip on overseas listings and use of client data. Additionally, the State Administration for Market Regulation investigated KE earlier this year for reportedly forcing property developers to list their projects only on its platforms . In the US, it is among US-listed Chinese companies that could face a delisting after the Securities and Exchange Commission last month approved a framework to determine which of these firms could be expelled from American capital markets for failure to fully allow auditing inspections. KE was the fourth largest among 27 Chinese firms in terms of market cap that could be eligible for delisting from the US, according to a Goldman Sachs report published on December 6. KE’s share price dropped almost 2 per cent overnight in New York, after slumping by more than 10 per cent earlier in pre-market trading. Tencent fell 2.9 per cent to HK$439.6 in Hong Kong in early trading on Friday. Entities affiliated with the Chinese social media giant owned a 11.6 per cent stake in KE, according to KE’s 2020 annual report. The Chinese online property agency said that it would debunk and reply to Muddy Waters’ claims one by one within 24 hours. It said the short-seller did not understand China’s property market, and had misunderstood its business and misinterpreted its financials. KE operates housing platforms Lianjia and Beike in China. The company was planning a listing in Hong Kong, Reuters reported in September. It raised US$2.1 billion in its US initial public offering in 2020, making it the second largest US listing by a Chinese firm at the time.