Yurun Food Group slumps on talk of short-seller attack

Turnover in Yurun's shares reached 11x the average 30-day volume on Monday, with short-selling accounting for 17% of turnover, Reuters reported.

Yurun told the Hong Kong Stock Exchange that it was unaware of any reason for the drop and that business was operating normally.

It is likely the sell-off stemmed from a note by Mirae Asset Securities stating there was growing consensus that Yurun would be the next target of Muddy Waters Research, a short-seller best known for exposing fraudulent activity at Rino International. Its report on Rino is seen as partly responsible for kick-starting much wider scrutiny of Chinese firms, particularly those listed in the US, by hedge funds and short-sellers.

The exposure of accounting discrepancies - some proven, some still conjecture - at a number of companies has had a negative impact on overseas-listed Chinese stocks across the board.

Temasek and Hopu bought $247 million worth of shares in Yurun before April 2010, but it is unclear how much they now own. ING Investment Management and JPMorgan Asset Management are also believed to be shareholders, although once again the current positions are unclear.

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• Topics
• Consumer
• Greater China
• Hopu Investment Management
• Temasek Holdings
• J.P.Morgan Asset Management