(Yicai Global) June 9 -- The shares of Hong Kong's leading furniture enterprise, Man Wah Holdings Ltd. [HKG.01999], resumed trading today after the company denied allegations by short-selling company Muddy Waters founded by Carson Block. The Hong Kong-listed company's shares surged 26 percent following its statement clarifying issues raised by Muddy Waters.
Man Wah's shares plummeted after Block said it was Muddy Water's latest short-sell target, forcing the furniture maker to halt trading of its shares last Wednesday. Man Wah called Block's allegations "groundless" today.
Man Wah Holdings was founded in 1992, and it mainly engages in research, development and sales of furniture such as sofas and mattresses, according to publicly available information. Muddy Waters' founder, Carson Block, said on June 7 that the operating data of Man Wah Holding are unauthentic and its liability is at least 48 percent higher than the amount declared, accusing it of suspected tax evasion and bad store management.
The share price of Man Wah plummeted 8.6 percent the first day and 10 percent the next day following Block's allegations. Its trading was suspended temporarily in the afternoon of June 7.
Man Wah Holding responded to Muddy Waters allegations point by point in today's statement it issued, calling them groundless, false and full of substantial errors. It also said it filed an official complaint to Hong Kong's Securities and Futures Commission.
The rise in share price of Man Wah slowed down later in the day, retreating to 9.78 percent surge from the initial 26 percent.