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UPDATE 1-China's Zoomlion shares suspended amid report of false sales
May 27, 2013 / 3:35 AM / 4 years ago

UPDATE 1-China's Zoomlion shares suspended amid report of false sales

(Adds reason for suspension, details)

By Yimou Lee

HONG KONG, May 27 (Reuters) - Trading in shares of Chinese construction equipment maker Zoomlion Heavy Industry Science and Technology Co Ltd was suspended on Monday morning pending the company’s response to a mainland media report that said its sales data was false.

The Hong Kong and Shenzhen-listed shares of Zoomlion should resume trading after the company issues a clarification report, an investor relations official told Reuters.

No further details were immediately available.

The mainland media report said a regional manager at Zoomlion, which competes with Sany Heavy Industry Co Ltd , was suspected of providing inaccurate sales figures in central China for 2012.

China’s heavy machinery sector slumped last year as companies struggled with mounting inventory and low utilisation rates after a glut in machinery spending spurred by China’s massive stimulus programme in 2008.

The world’s second-largest economy grew last year at its slowest pace since 1999 and demand for construction raw materials has been lackluster so far this year.

Zoomlion’s Hong Kong-listed stock was down 0.88 percent prior to the suspension.

In April, Zoomlion reported a 71.7 percent drop in first-quarter earnings to 591.8 million yuan ($96.52 million).

In January, shares of Zoomlion slid after the company denied a report of irregular accounting. Hong Kong newspaper Ming Pao Daily News reported then that it had received an anonymous letter questioning Zoomlion’s sales growth figures in the first quarter of 2012 and alleging inflated revenues by including potential orders as sales.

In a filing to the Hong Kong bourse at the time, Zoomlion said all allegations relating to its financial information as reported in the Ming Pao report were false, groundless and misleading..

Shares of the company have dropped more than 30 percent so far this year, lagging a flat broader market.

($1 = 6.1316 Chinese yuan)

Additional reporting by Twinnie Siu and Fang Yan; Editing by Anne Marie Roantree

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