Carson Block fishes for clarity in China's muddy business waters
Short-seller learned about business on the mainland the hard way and aims to keep digging into its firms to protect investors
Carson Block, founder of Muddy Waters Research, parlayed his short-selling research reports into a reputation as an expert in the detailed inner workings of China's corporate world.
But the 36-year-old modestly describes himself as being only a "big-picture guy" who looked into China's problems and couldn't help but spot the dodgy dealers and their frauds.
"China is a low-trust environment," Block told the South China Morning Post. "My observation is that if you take a look at any organisation or society, it's the top that is corrupt. Corruption flows from the government."
Muddy Waters got its name from an old Chinese proverb that says: muddy waters make it easy to catch fish. But in modern China the muddy waters refer rather to loopholes in the regulatory system that make it easy for sharp operators to chase easy profits.
Block said he aimed to help Western investors better understand the Chinese corporate culture and the mentality of entrepreneurs.
Evolving from a one-man research outfit, Muddy Waters rose to global prominence in mid-2010 when it began publishing reports accusing overseas-listed Chinese companies of fraud - accusations that caused share prices to plummet.