Apple supplier, AAC Technologies Holdings, has denied a short-seller’s accusation of “dubious accounting practices,” reports the South China Morning Post.
The Post reports that Gotham City Research, one of the top five short-sellers worldwide, claims AAC used more than 20 undisclosed related parties to overstate its profits and to evade Apple’s labour standards. The accusations resulted in AAC shares plunging 10.5 per cent on Thursday to HK$99.4. It was the biggest fall since May 2010, and followed a record high of HK$114.2 at the end of April.
AAC was the fourth-worst performer as the benchmark Hang Seng Index rose 0.4 per cent to reach 25,125.55, the highest closing level since July 2015, according to the Post.
In a filing to the Hong Kong Stock Exchange, AAC chairman Koh Boon Hwee, denied the “allegations in the report and considers the information contained therein to be inaccurate and misleading.” AAC is seeking legal advice on the matter, according to the Post.
AAC in March reported a net profit of RMB 4.03 billion in 2016, up 29.6% from the previous year and a net profit margin of 26%.The group was founded in Shenzhen in 1993.
AAC is expected to report first quarter earnings today after market close.