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CITRON REPORTS ON EVERGRANDE REAL ESTATE GROUP LTD PDF

to these bribes, subsequent land purchases, and related real estate construcnon acnvines, Evergrande has employed a Source: Evergrande filings, Citron research. Note: Evergrande reported 35bn of equity including minority interests. .. Hunan Xiongzhen Investment Co., Ltd (湖南雄震投資有限公司). [1]. Andrew Left heads a Los Angeles-based company, Citron Research, an in- depth analytical report on Evergrande Real Estate Group Ltd, now. Evergrande Real Estate Group Limited concerning the Group in the Report. relation to a report (the ”Report”) issued by Citron Research.

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Negligence Counsel for Mr Left argued that negligence was not properly to be read as applying to all persons but only to those persons who, by their actions, had an existing duty and a standard of care to meet and it had to be demonstrated that the person stood in or had assumed a special relationship to the market, e.

Chinese developer Evergrande dives on short-seller report

Counsel for Mr Left argued that negligence was not properly to be read as applying to all persons but only to those persons who, by their actions, had an existing duty and a standard of care to meet and it had to be demonstrated that the person stood in or had assumed a special relationship to the market, e. On 22 June, Evergrande issued a longer announcement rejecting the allegations. He went ahead without such advice while still retaining the sensationalist language of the Draft, language that of itself, he must have appreciated would cause a degree of consternation among members of the investing public.

Left reviewed the material, deleted publicly non-verifiable information using the internet and company filings, updated the numerical information and published it as his report. For the same reasons as above, the Tribunal found that Mr Left had been negligent. Register now for your free, tailored, daily legal newsfeed service.

Misleading the market: an analysis of the Citron Research case | CSJ HKICS

Yet, Mr Left when conducting his verification exercise, chose not to take the most obvious precaution of seeking expert advice. My saved default Read later Folders shared with you. Citron Research had established a certain reputation for itself, with a degree of notoriety, and was therefore likely to be estatd attention, especially given the sensationalist language used in the Report.

This is a rare case, though, of a mainland property company being accused of outright financial mismanagement. Its share price was relatively stable from April to June Andrew Left heads a Los Angeles-based company, Citron Rgoup, which publishes stock commentaries on its website. Keep up the good work, it’s most appreciated!.

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Chinese developer Evergrande dives on short-seller report | Reuters

The MMT decision was carefully made with an awareness of the need to balance freedom of speech and investor protection. The Tribunal found that Mr Left had been reckless in his publication of the Report. It also rejected that the MMT erred in finding that Left must have known that his allegations required accounting expertise.

The test as to knowledge was whether Mr Left knew when he published the Report that the information in question was false or misleading. Section 1 of the SFO prohibits dissemination of false or misleading information about securities or futures that is likely to induce another person to trade in the securities or affect the price of the securities.

Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world. Knowledge, recklessness or negligence The Tribunal explained the tests involved in proving knowledge, recklessness or negligence and ruled in relation to each as follows.

Misleading the market: an analysis of the Citron Research case

There was no argument that Left had disseminated information by issuing his report. Likely effect on the estatr The Tribunal made it clear that the test was a predictive, objective test, namely the Tribunal was required to ask itself not whether the posting of the Report on ktd Internet did have an impact on the Hong Kong market by inducing the sale or purchase of Evergrande shares, but instead was required to determine whether, having regard to all relevant factors, it was probable at the time when the Report was posted that it would have such an effect.

The test in respect of negligence which is objective was in compiling and publishing the Report, did Mr Left exercise that level of care to avoid the inclusion of false or misleading information as to material facts that is realistically required of a reasonably prudent person carrying out the function of a market commentator or analyst?

Like Muddy Waters, Citron Research, run by Andrew Left from his Beverley Hills, California home, is known for targeting companies with research exposing what it claims are financial irregularities. The requisite elements that must be proved are: The allegations contained in it were direct and combative and of utmost seriousness and, whether on more careful analysis, it proved to have no substance, it must on any initial reading have been a disturbing document and one quite capable — even if over a limited period of time- of having an impact on the market.

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Section 1 of the SFO prohibits dissemination of false or misleading information about securities or futures that is likely to induce another person to trade in the securities or affect the price of the securities.

The fact that Mr Left svergrande many years of eevrgrande in publishing corporate commentaries, seemingly specializing in hunting down corporate fraud, meant that he must have appreciated that anonymous reports of this kind making allegations of fraud, payment of bribes and other illegal dealings required careful scrutiny.

Share Facebook Twitter Linked In. The MMT considered that, as someone who held himself out as an expert in detecting corporate fraud, Left should either have sought expert accounting advice or sought comment from Evergrande, as regulated analysts often do. On 21 June, he bought shares to cover his short position.

Hong Kong Market Misconduct: By continuing to use this website, you agree to the use of these cookies. It ruled that Evergrande had not used trust grou; as a means of concealing off-balance sheet debt, rather as a means of financing the buying of land.

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This is a business lfd of Andrew Left. The MMT rejected this, ruling it would not protect financial markets sufficiently from false or misleading information.

The Tribunal made it clear that the test was a predictive, objective test, namely the Tribunal was required to ask itself not whether the posting of the Report on the Internet did have an impact on the Hong Kong market by inducing the sale or purchase of Evergrande shares, but instead was required to determine whether, having regard to all relevant factors, it was probable at evergeande time when the Gfoup was posted that it would have such an effect.

Was he further aware that in the circumstances the risk was of such substance that it was unreasonable to ignore it?