NewThird Hong Kong-listed firm accused of inflating profits

China Fiber Optic Network System has become the third Hong Kong-listed firm in two weeks to have been accused of cooking its books.

The Shijiazhuang, Hebei province-based firm, which makes fibre optic patch cords used in the telecommunications industry, requested the stock exchange halt trading of its shares on Monday morning after anonymous company researchers and short-seller Emerson Analytics published a report targeting China Fiber Optic.

"It has been exaggerating its revenue, and therefore profit and other financial data, by many, many times," Emerson said in the report.

The allegation comes days after two similar allegations against mainland companies listed in the city. Liaoning-based aluminium extrusion products maker China Zhongwang was accused by short-seller Dupre Analytics of defrauding its investors through secret connected transactions and fabricating at least 62.5 per cent of revenue since 2011.

Meanwhile, electricity distribution equipment maker Boer Power was accused by a mainland media report of having inflated its net profit by almost five times.

Boer late on Friday issued a statement refuting the allegations that saw its share price rise 3.9 per cent on Monday. Zhongwang has yet to release a detailed rebuttal of the allegations and its shares remain suspended.