2015-03-18

Short-Seller Investigated in Hong Kong

Yesterday I posted Chinese Banks Bailout Evergrande and linked to an older post from 2012: Citron says Evergrande is insolvent, saying that Citron may be proved correct.

Turns out Citron is on trial.

Tribunal begins hearing case of short-seller who alleged developer Evergrande was insolvent
A Hong Kong tribunal started a preliminary hearing on Wednesday involving the head of US short-seller Citron Research over allegations that Citron published a “false and misleading” report about China’s fourth-biggest developer, Evergrande Real Estate Group, in 2012.

The hearing, in the Securities and Futures Commission’s first such action against activist short-selling firms, coincides with fresh signs that heavily indebted Evergrande has become a target as global investors become increasingly worried about pressure on Chinese developers’ cash flow in the wake of peer Kaisa Group Holdings’ offshore debt defaults and the industry’s struggle to overcome a serious glut, particularly in third and four-tier cities where Evergrande has a strong presence.

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