Singapore regulator seeks review of fraud allegations at cosmetics firm Best World

SINGAPORE, April 25 (Reuters) - Singapore’s securities regulator has called for an independent review of fraud allegations made by a short-seller against Best World International Ltd, which knocked 9 percent off the cosmetics firm’s share price on Wednesday.

Shares in the closely held Singapore-listed firm have halved since February when local media questioned Best World’s sales figures in China. The firm responded to the media report by saying its business was sound.

“We expect the company to call for a full independent review of all matters raised in the (short-seller) report so that shareholders will have a complete picture and can make informed decisions,” Singapore Exchange Regulation, the bourse’s regulatory arm, said in a statement late on Wednesday.

“We expect to be consulted on the terms of reference of the review and will require the reviewer to report directly to us and the company’s audit committee,” the regulator said.

Reuters was not immediately able to reach Best World for comment.

Short-seller Bonitas Research on Wednesday questioned the firm’s accounting in a report titled “Best World = Fraud”, saying its “Chinese sales are a fraction of what was reported to shareholders”.

In February, Best World said it would appoint an independent reviewer after Singapore’s Business Times newspaper said it was challenging to understand where and how the company was selling a line of premium skin care products in its key market China.

At the time, the company said it conducts all areas of business ethically and in compliance with applicable laws and accounting standards, and was confident its business and accounting practices would stand up to scrutiny.

Trading of Best World’s shares was halted on Wednesday morning. (Reporting by Aradhana Aravindan; Editing by John Geddie and Christopher Cushing)