Chinese electric motor maker Harbin Electric on Friday denied any Securities and Exchange commission (SEC) investigation against it, while responding to an allegation made by Citron Research in a recent blog post.
Andrew Left, who runs Citron from his home in Beverly Hills, California, wrote on Wednesday that Harbin was under SEC scrutiny till the moment its planned management buyout was completed.
Embattled Harbin Electric Chief Executive Tianfu Yang had filed a preliminary merger proxy statement with the SEC in June to purchase the company in a deal valued at $754.5 million.
Let me make it very clear that the company is not the subject of any informal or formal SEC investigation and that it has never been, Yang said in a statement on Friday.
A rash of accounting scandals involving U.S.-listed Chinese companies have come to light in recent months. Many of them have listed on U.S. exchanges via reverse takeovers.
Harbin has remained a target of short-seller Citron Research, which has been raising questions about the deal and the past activities of CEO Yang.
Left, in his blog post dated August 3, raised more questions about the company's financial statements and proposed management buyout.
Citing data collected from private investigators in China, he alleged the company was overstating revenues and raised questions on its relationship with its largest customers.
Even after CEO Yang's buyout proposal of $24 a share, the company's stock has remained several dollars short of the offer price, indicating investor skepticism over the deal.
It is becoming quite clear that people aligned with short-selling interests are doing everything they can to mislead the market in general ... to continuously depress our stock price for the benefit of a few, Yang said on Friday.
Shares of Harbin, which touched a two-year low at $5.82 when Citron questioned the proposed management-led buyout on June 16, have more than tripled in value and closed at $18.05 Thursday on Nasdaq.
(Reporting by Bijoy Koyitty in Bangalore; Editing by Joyjeet Das, Saumyadeb Chakrabarty)