Carson Block Alleges “Inconsistencies” At Man Wah; Shares Plunge 10%
Short-seller Carson Block sent shares of Man Wah Holdings Ltd. plunging 10% before trading in the stock was halted on Wednesday after he alleged that the Hong Kong-listed furniture maker has inconsistencies in its taxes and undisclosed liabilities.
This isn’t the first time that Block, who delivered a presentation about the company at Sohn Hong Kong, has taken aim at a Hong Kong-listed firm. China Huishan Dairy Holdings Co. sank 85% in March, a few months after he published a report alleging fraud at the company, Bloomberg reported.
He also estimated that the Man Wah’s debt is at least 48 percent higher than reported, but said he couldn’t give a price target for the stock because when “we’ve come to believe a company has committed fraud, it’s impossible for us to say in most cases where we think this much is real and this much is not real.”
Hong Kong has one of the world’s best-performing benchmarks but, as Bloomberg reports, it has seen some spectacular crashes.
“This has become an industry,” Francis Lun, the Hong Kong-based chief executive officer of Geo Securities Ltd. told Bloomberg, referring to activist short sellers in the city. “Definitely we will see more.”
Short interest in Man Wah stock accounts for about 2.9 percent of the free float, according to the latest data compiled by IHS Markit Ltd. Man Wah declined to comment to Bloomberg on the allegations and is preparing a statement, according to an external media representative.
Man Wah wasn’t the only stock targeted at this year’s Sohn Hong Kong conference. Shares of Dali Foods Group Co. sank 6% after GeoInvesting LLC’s Dan David revealed a position in the stock.