Hacktivist group Anonymous’s new securities research branch, dubbed Anon Analytics, recently published a damning report about Chaoda Modern Agriculture, a Chinese vegetable and fruit supplier.
The 38-page report alleges Chaoda has committed “one of the Hong Kong exchange’s largest, and longest running frauds.”
It’s very reminiscent of model used by Muddy Waters, which has attempted takedowns of Chinese companies, like Sino-Forest.
The report claims the company has duped investors and falsified its financial statements.
From Anon Analytics (PDF):
Chaoda’s long history as a public company is mired in lies and corporate fraud. Under the cover of inflated capex spending and related party transactions, management has transferred more than US$400M out of Chaoda. In so doing, the Company has overstated its cash balance and falsified its financial statements. The CEO, with the support of the board of directors has invested in risky projects that have robbed shareholders of returns in order to line his own pockets. In an attempt to cover their egregious actions, management has paid a fraudulent company to provide Chaoda positive marketing exposure.
Anon Analytics, which acquires information through “unconventional means” according to its website, claimed all information for the report was obtained legally.
In addition to what is presented here, certain information has been brought to our attention which given its nature we have decided to withhold. However, based on all available information, we believe Chaoda is misleading investors and misrepresenting its operations.
Apparently more is coming.
We will present evidence showing management has actively lied to investors, committed corporate fraud, and enriched itself at the expense of shareholders.
Might be relevant: Last week, Chaoda’s top executives were accused by Hong Kong’s finance secretary of supplying insider trading to a Fidelity Investment’s portfolio manager, who allegedly used the information to trade profitably.
The report includes a legal disclaimer and the group says they do not hold a “direct” position in any of the companies mentioned.