Nutritional supplements and health drinks maker Real Nutriceutical’s shares fell by nearly a fifth after it terminated a HK$324 million rights shares issue and denied short seller Glaucus’ allegation that it cooked the books. Real said in a filing to Hong Kong’s bourse on Sunday that the cancellation of the offer announced on October 5 to sell new shares to all existing shareholders at a 31 per cent discount was due to the precipitous fall of its share price since its announcement. Real’s shares on Monday closed 16 per cent lower at 84 HK cents, after trading as low as 81 cents, below the 90 cent rights share offer price. The stock has now fallen 75 per cent from a high of HK$3.3 seen early June. The proceeds from the rights issue was intended to fund potential acquisitions. Late Thursday, Real issued a 29-page rebuttal of United States-based short-seller Glaucaus Research Group’s allegations that it inflated revenue and profits and that it lied about the independence of two major customers. READ MORE: China LNG boss strikes back at Glaucus Research attack In a October 22 report, Glaucus claimed that filings by Real to China’s Ministry of Commerce (Mofcom) showed its two main subsidiaries that together accounted for over 90 per cent of its revenues, generated only 839 million yuan in combined revenues between 2011 and 2013, 84 per cent less than what it reported in its filings to Hong Kong’s stock exchange. Their combined operating profit of 26 million yuan for the period was 99 per cent less than that in its Hong Kong filings, it added. In its rebuttal, Real said the alleged discrepancies were “erroneous and misleading”. It said it has retrieved the financial statements filed to Mofcom and the local Wuxi unit of the State Adminstration of Industry and Commerce (SAIC) and found both of them to be consistent with the audited ones of the subsidiaries, adding it will make hard copies of the Mofcom filings available for public inspection at the office of its Hong Kong counsel for two weeks. It added that its auditor, Deloitte Touche Tohmatsu, has not withdrawn its unqualified audit opinions on its books for the past four years and it will voluntarily engage one of the “big four” international accounting firms to review Glaucus’ allegations and its own rebuttal. Real also said the “so-called Mofcom filings” cited by Glaucus “appeared to be [an] extract of certain data found in the foreign exchange reports” in the Wuxi government’s annual reporting database for companies. The data in such reports come from “certain budget” financial statements it submitted to the local district finance bureau at the request of the local government for planning purposes, it said. “Complete nonsense”, responded Glaucus in a follow-up report to Real’s rebuttal, adding the financial data it cited are from documents clearly labelled “income statement” and not “budget.” “If these were budgets and not financial statements, wouldn’t the numbers be vague estimates, and not numbers listed down to [decimal places]?” Glaucus said, adding “it makes no sense” for local district governments in Jiangsu to ask for budget sales figures for Zhejiang province. Real also denied Glaucus’ allegation that it had lied about the independence of two major customers from Real and its chairman, saying it has not breached listing rules on related party disclosures. Glaucus claimed one of Real’s five distributors is a subsidiary of Real while another is owned by Fan Xijuan, who is employed by a firm owned by Real’s chairman Wang Fucai.