* Probe following allegations by Muddy Waters in June
* Co to make public full results of probe next week
* Shares rise 12 percent
Nov 24 Chinese paper company Orient Paper
(ONP.A), which was accused by a Hong Kong-based brokerage of
accounting impropriety, said it was "pleased" with the results
of a probe by its audit committee, sending its shares up 12
The company did not disclose details, but expects to make
full results of the investigation public next week.
In a damning report in June, Muddy Waters LLC initiated
coverage of the company with a "strong sell" rating, and
accused it of overstating revenue and margins. Orient Paper
started an accounting probe soon after.
Earlier this month, Muddy Waters took on another Chinese
firm, Rino International RINO.O, accusing it of fabricating
customer relationships. Rino's auditors did find accounting
Disclosures are limited among overseas firms, and
accounting irregularities have surfaced at other Chinese
companies as well. [ID:nTOE65R04]
The companies' quarterly income statements and balance
sheets are typically less detailed than those from U.S.
companies. Cashflow statements are only issued once a year
under U.S. SEC rules for companies deemed incorporated outside
Shares of Orient Paper and Rino touched year-lows post the
reports by Muddy Waters -- which had a short position in both
stocks -- and have lost 60 percent of their value since then.
Orient Paper shares rose 12 percent to a high of $6.15
Wednesday morning. Rino stock has been halted for a week.
(Reporting by Adveith Nair in Bangalore; Editing by Don