New Oriental says short seller's allegations lacked evidence

Mon Oct 1, 2012 10:45am EDT

Oct 1 (Reuters) - New Oriental Education & Technology Group Inc said its investigation did not find any "significant" evidence to support certain allegations raised by short-seller Muddy Waters.

Carson Block's Muddy Waters in July alleged that the education provider had lied about its entire store network being company owned and the franchise fees were used to inflate its cash balances.

China-based New Oriental had rejected the allegations then, before proceeding to set up a special committee to investigate the matter.

The committee comprised the company's three independent directors, New Oriental said.

New Oriental shares, which have gained 16 percent since the allegations were made on July 18, were up 5 percent in morning trading on the New York Stock Exchange.

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