January 14, 2011 / 4:39 PM / 9 years ago

UPDATE 1-China Valves refutes broker comments on audit concerns

* Ups 2010 rev view for Changsha Valve to $30 mln

* Says strong demand boosts Changsha Valve results

* Shares fall 8 pct to new year low

Jan 14 (Reuters) - China Valves Technology Inc CVVT.O refuted comments made by Citron Research on Thursday that the metal valves maker may be delisted from Nasdaq as it faces increased regulatory scrutiny over certain buyouts.

The brokerage had said that the financial results of Changsha Valve, an acquisition China Valves had made in 2010, have been overstated and that the acquisition was an improper related party transaction.

“China Valves strongly disputes these assertions. Changsha Valve, which was acquired from Watts Regulator Co, has performed very well under the management of China Valves,” the company said in a statement.

Following the publication of a Citron note, China Valves shares had dropped 18 percent in trading after the bell. [ID:nSGE70CBB4]

The company on Friday also raised its 2010 revenue expectations for the acquired company to about $30 million from its prior view of about $20 million, helped in part by strong demand for water treatment infrastructure in China.

Shares of the company, which touched a year low of $6.60 in early trade, pared some of their losses and were down 13 cents at $7.02 in late morning trade on Nasdaq. (Reporting by Bijoy Koyitty in Bangalore; Editing by Sriraj Kalluvila and Gopakumar Warrier)

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