Man Wah shares soar as sofa maker fights back against Muddy Waters’ short sale

Man Wah Holdings shares soared up to 26 per cent on Friday, nearly clawing back all their previous losses, after the furniture maker rebuffed allegations by short-seller Muddy Waters Capital, which targeted the company and raised questions about its accounting figures.

Man Wah had halted share trading since Wednesday afternoon, shortly after Muddy Waters’ founder Carson Block announced that he had bet against Man Wah, triggering a 15 per cent plunge in the stock price, which reached HK$6.02 before suspension. In the previous session, it declined 8 per cent to HK$6.73 on speculation it had become a target of Muddy Waters.

Shares of Man Wah briefly surged 26 per cent to HK$7.6 after trading resumed on Friday. It closed up 8.8 per cent at HK$6.56. Daily turnover for the stock reached HK$1 billion, with 154 million shares changing hands.

“The Muddy Waters [presentation] contains allegations which are groundless and contains various

misrepresentations, malicious and false allegations and obvious factual errors about the group,” the company said in an exchange filing before Friday’s market open.

Man Wah has instructed legal advisers to make a formal complaint to Hong Kong’s securities regulator, the filing said.