Food producer China Minzhong Food yesterday became the first Singapore-listed Chinese firm to come under attack by a short seller, which wiped off more than 50 per cent of its market value in two hours and triggered a trading halt. Short sellers have in recent years targeted Chinese companies listed in Hong Kong, Canada and the United States, citing irregularities, but they had so far avoided any of the 143 Chinese-based firms listed on the Singapore exchange. China Minzhong, which until yesterday's share price slump had a market value of about US$520 million, was hit after Californian-based Glaucus Research issued a report alleging the company misled investors about sales to its biggest customers. The report also raised questions over the credibility of China Minzhong's financial performance compared with its peers. Glaucus said it and its associates had a direct or indirect short position in the company. Travis Seet, China Minzhong's financial controller, said the company was taking legal advice on how to respond to the report. He declined to make any further comment and trading was halted pending an announcement from the company. China Minzhong listed in Singapore in 2010 and attracted several big-name investors, including Singapore sovereign wealth fund GIC, which sold its 14.4 per cent stake in February to Indofood Sukses Makmur. Indofood had no response to the queries on China Minzhong. Other large investors include Franklin Templeton Investments, which holds just under 11 per cent of the food producer. Analysts said China Minzhong would struggle to recover from its share price plunge regardless of the veracity of the short seller's allegations. "Given the huge damage done already, we believe it will be an uphill task [especially without GIC's backing now] for the company to rebuild confidence," Lim & Tan Securities wrote in a note. Shares in China Minzhong dived 47.8 per cent in two hours of trade before the company requested a trading halt. Nearly 24 million shares were traded, almost 10 times the average full-day volume traded over the past month. Four analysts have a "buy" or "strong buy" on the stock, Thomson Reuters data shows. China Minzhong is due to release full-year results on Thursday. A number of Chinese companies listed in Singapore ran into accounting problems in 2008 and 2010, denting investor confidence in the stocks, known as S-chips. The Singapore exchange has since then taken steps to improve corporate governance of listed companies and after the trading halt, the regulator said it had asked China Minzhong to confirm the company was in compliance with the rules. China Minzhong is not the only Chinese-based stock targeted by Glaucus this year. The group, whose research is overseen by former lawyer Soren Aandahl, accused Hong Kong-listed China Metal Recycling of fraud in January. Hong Kong's securities regulators have since applied to the courts to have China Metal Recycling liquidated. Last year, high-profile short seller Muddy Waters attacked Singapore commodity trading firm Olam, prompting the company to raise cash as its stock and bond prices tumbled. Singapore state investor Temasek stepped in to prop up the company, raising its stake to 24 per cent from 16 per cent.