Cogobuy hit by short-seller report
The share price of Cogobuy Group (0400) plunged by 22 percent yesterday and trading in its shares was suspended after short-seller Blazing Research accused the e-commerce service provider of engaging in "a scam" for 10 years.
The Singapore-based short seller alleged in a report that Cogobuy "fabricated its revenue and net profit since listing in Hong Kong" and its online platform and "the 'largest intelligent hardware innovation business platform,' known as IngDan, is a complete scam."
Cogobuy's share price fell by as much as 27 percent before closing at HK$7.80 yesterday. Turnover was HK$244 million.
The short-seller, composed of a team of retired financial professionals according to its website, said Cogobuy.com has been down for a week without any maintenance and that online intelligence providers showed that Cogobuy.com has minimal amount of traffic compared to its peers.
It added that there was significant deviation between Cogobuy's revenue figures in its filings to the State Administration for Industry and Commerce and figures that it reports in its annual reports.
Cogobuy chairman Jeffrey Kang Jingwei said Blazing Research has no evidence to support its allegations, adding that Cogobuy immediately reported the case to the police.
Kang also said that Cogobuy will continue buying back its shares.
From The Standard
Dominique Nguy May 23, 2017
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