China Metal Recycler, accused of fraudulent accounting, in wind-up fight; Atlantis Investment Management Liu Yang, dubbed “China’s female Buffett”, sold 4.42m shares in Aug off-market at HK$1, a discount of 90%

October 22, 2013 Leave a comment

Recycler steels in wind-up fight
Gary Chau
Tuesday, October 22, 2013
China Metal Recycling (0773) chairman Chun Chi-wai said yesterday a petition by the Securities and Futures Commission to liquidate his company is not in the interests of shareholders. It was Chun’s first public statement since his arrest in July for alleged fraudulent accounting. Outside the High Court, he said the liquidation is neither fair nor appropriate and claimed he did nothing illegal. The SFC probe has already affected the Guangzhou-based recycler’s operations and caused losses, he said.In court earlier, the SFC, which has been granted an order to appoint provisional liquidators to wind up the company, did not object to Chun and his wholly-owned Wellrun entering the winding-up petition as respondents.

Judge Jonathan Harris ordered both the SFC and the defendants to submit further information in eight weeks, and adjourned the proceedings to March 10.

The watchdog accuses Chun of involvement in fraudulent accounting, saying it started collecting evidence as early as 2011.

The liquidation move in July is a rare one by the local watchdog.

The High Court has appointed Borrelli Walsh as the provisional liquidator.

US-based short seller Glaucus accused the firm of faking its accounts in January.

Since then, the stock has been suspended, with its price stuck at HK$9.43.

But an ominous sign came in August when Atlantis Investment Management chairwoman Liu Yang sold 4.42 million shares in the over-the-counter market at an average price of HK$1, a discount of 90 percent.

Wellrun said in a statement yesterday that China Metal Recycling is not insolvent and that its financials are sound.

It claimed the firm had support from banks, clients and suppliers – even though its shares have been suspended for more than six months.

Filed under Investing Process, Macro Trends

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