Hengan International continues to fall as it refutes fraudulent reporting allegations
- Bonitas Research claims that the company has fabricated a total of US$1.6b of net income since 2005
Shares of China’s leading sanitary towel and nappy producer Hengan International Group fell after they resumed trading on Thursday, even as the company denied allegations from a short seller of fabricating income.
The stock dropped as much as 5.9 per cent before closing 3.7 per cent lower at HK$54.95. It fell 5.7 per cent before trading was halted on Wednesday after Bonitas Research alleged in a report the company had fabricated a total of 11 billion yuan (US$1.6 billion) of net income since 2005.
The company “denies all of the allegations against” it in the Bonitas report, it said in a statement published on early Thursday. Bonitas claimed the stock was “worthless” because of the fraudulent financial reporting and the amount of debt incurred.
Hengan International said the report contained statements that were “misleading, biased, selective, inaccurate and incomplete” as well as “groundless allegations and irresponsible speculations”.
It said it could consider taking legal actions against Bonitas.