The company that claims to be the largest metal recycling company in China has suspended trading of its shares on the Hong Kong stock exchange.
China Metal Recycling (CMR) says it is the largest mainland scrap metal recycling company in China based on its 2008 revenue.
But a report from American short-seller Glaucus Research Group has branded this a “lie”.
As a result, CMR has suspended its shares on the Hong Kong stock exchange while it prepares a response to the allegation.
In the report, Glaucus said: “CMR purports to be the largest scrap metal recycling company in China. We believe that this is a lie.
“Publically accessible import data from the Chinese Government suggests that CMR is a blatant fraud that has deceived the market about the size of its business.”
The report notes that the company has never been legally allowed to import more than 87,500 tonnes of non-ferrous scrap metal in a year, yet the company would have to be importing an average of around 120,000 tonnes of non-ferrous scrap per month in 2011-12.
It also says that CMR is not even in the top ten of monthly scrap copper importers, and that its competitor Chiho-Tiande is the top importer each month despite supposedly being one fifth the size of CMR by sales.
