New | China Zhongwang hits back at short seller's fraud allegations
Aluminium product maker denies claims made by Dupre Analytics
China Zhongwang Holdings has hit back at short seller Dupre Analytics' anonymous allegation that chairman Liu Zhongtian, his family and related "proxies" have been siphoning money and products away from the company to locations aboard.
"The company believes the allegations in the Dupre report are groundless ... contains various misrepresentations, malicious and false allegations and obvious factual errors," it said in a filing to Hong Kong's stock exchange last night.
The 51-page Dupre report published early this month alleged Liu and his related parties to have "[fabricated] at least 62.5 per cent of revenue since 2011 and likely been skimming billions of [capital expenditure] from the delayed [production facility] in Tianjin".
The report alleged that Liu and parties took out some HK$36.5 billion in loans from mainland Chinese banks that are guaranteed by Zhongwang, and had been using the funds to buy Zhongwang's aluminium products since 2011.
Dupre alleged that Liu's family had used "a network of proxies and intermediaries" in China and abroad to fraudulently move Zhongwang's products to the United States, Mexico, Malaysia and Vietnam and profit by reprocessing and selling them.
Zhongwang rejected the allegations, saying its financial statements have been audited by external independent auditors that belong to the "big four" accounting firms, which have issued unqualified opinions every year since its listing in 2009.
