(Yicai Global) Dec. 17 -- KE Holdings, China’s biggest online real estate agency, has dismissed allegations of “massive fraud” leveled at the Chinese firm by Muddy Waters Research, which compared it with Luckin Coffee, saying it will respond to the US short seller’s claims within 24 hours.

KE will issue a point-by-point refutation of Muddy Waters’ allegations to ensure the interests and rights of investors and prevent the short seller from spreading false information, the Beijing-based company said in a statement yesterday.

In a 77-page report, released earlier the same day, San Francisco-based Muddy Waters said KE inflated new home sales by more than 126 percent and commission revenue by between 77 percent and 96 percent.

Muddy Waters also said it found “massive discrepancies” between the transaction volumes, store and agent numbers reported to investors and the transaction data from KE’s platform. It also accused KE of having designed sham acquisitions to mask fraudulent revenues and claimed to have found ghost and clone stores as well as undisclosed schemes to inflate revenues by round tripping cash through connected brokerages.

“Similar to Luckin Coffee, this is a real business with significant amounts of fraud,” the report said.

KE’s shares [NYSE: BEKE] ended 2 percent lower in New York yesterday at USD18.31.

Muddy Waters knows little about the Chinese property market, so it lacks a basic understanding of KE’s business, the company said. KE, which is backed by China’s Tencent Holdings and Japan’s SoftBank Group, said it is open to investigation to demonstrate the authenticity and standardization of the data in its financial reports and will resist any short-selling behavior.

Ke is not the first listed Chinese business to come under scrutiny by Muddy Waters. It has previously targeted Luckin Coffee, Joyy, Gaotu Techedu, iQiyi and Anta.

Revenue from KE’s new home business rose 2.5 percent to CNY11.3 billion (USD177.4 million) in the third quarter from a year earlier, according to its latest financial report. The gross transaction value was about CNY410.1 billion (USD64.4 billion). In the January to September period, new home GTV soared 37 percent to CNY1.3 trillion (USD2 billion) from a year ago.

As of Sept. 30, KE had 53,950 stores, 515,485 agents, and 46.1 million mobile monthly active users.

Editor: Futura Costaglione