Bosideng Falls Most on Record After Short Seller Report

(Bloomberg) -- Bosideng International Holdings Ltd. shares fell the most on record after a short seller report questioned the company’s accounting practices.

Hong Kong-listed Bosideng overstated its revenue and profit, according to a note published on Monday by Bonitas Research. The stock fell as much as 28% before being suspended. Bosideng said in a statement that the report contains “untrue and misleading information,” without providing more details.

Short sellers have in recent years zeroed in on Hong Kong stocks. The city, the world’s fourth-biggest equity market by value, has seen several corporate governance blow ups, with companies losing 90% of their value in a single day. The local exchange operator and securities regulator have raised the threshold for going public, and have said they are cracking down on corporate fraud.

Bonitas, founded by Texas-based short-seller Matt Wiechert last year, has previously published short reports on Hong Kong stocks including Chong Sing Holdings FinTech Group Ltd. and Hengan International Group Co.

Chong Sing has lost about 96% of its value since Bonitas first questioned the company’s financial reporting in September. Hengan is down about 6% since the short seller published a report in December. Both companies denied Bonitas’s allegations.

Wiechert also targeted Singapore-listed Best World International Ltd. in April, saying the business overstated sales and profit in China. The shares fell more than 23% after the allegations were made public and have since been suspended, though Best World refuted the report’s conclusions.

--With assistance from Jeanny Yu.

To contact the reporter on this story: Benjamin Robertson in Hong Kong at brobertson29@bloomberg.net

To contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Jeanette Rodrigues

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