Everrgrande Real Estate Group (NASDAQ:HK3333)

BEIJING, June 29, 2012 /PRNewswire-Asia/ -- Sina Leju today issued a report further commenting on Evergrande real estate. On June 21, Citron released a report of 57 pages, which caused Evergrande to be involved in a short-selling disturbance. In the following 84 hours, Evergrande made a complete and continual response to Citron. Sina Leju notes that the disturbance involved the stock markets of Hong Kong and Mainland China with investment banks worldwide finally coming to the aid of Evergrande, standing behind them. Details of Sina Leju's report follow:

After Citron released their report, Evergrande immediately released a clarification announcement and held an emergency telephone conference to respond. The next day, Evergrande also released a detailed clarification announcement to respond to Citron's report item by item, and convened a global investor conference rapidly. The quick response and the efficient challenge acceptance of Evergrande's management in the face of the crisis were praised by many media at home and abroad, and laid the foundation for Evergrande to get the most gain from their response.

Affected by Citron's report, the stock price of Evergrande dropped, with the drop range of 11.4% on the same day. However, several days later, under the support of the international investment banks, Evergrande made up lost ground in the stock market rapidly, with an increase in stock price for three consecutive days. On June 25, Evergrande's stock achieved an increase of 2.61%, successfully leading the large-scale Mainland real estate stocks; on June 26, Evergrande's stock outperformed by virtue of an increase of 1.3%, which closed at HKD 3.98; on June 27, Evergrande's stock achieved an increase of 1.26%, which closed at HKD 4.03.

Sina Leju's report also notes that the potential of short-selling in international capital and the real estate industry as a whole is a dangerous prospect, with the potential to cause a domino effect and an intensive crisis in the real estate industry. As a listed company with rapid development, Evergrande got the best of their response, which accumulates good experience for Evergrande itself and other enterprises to deal with the short-selling of international capital.

BEIJING, June 22, 2012 /PRNewswire-Asia/ -- Citron, an international professional short seller company, published a report with a very sensational conclusion on June 21: Evergrande Group, China's largest real estate company listed in Hong Kong stock market, is insolvent and has been reporting false information to investors in the past. This report suffered severe reprimands from the investors and Evergrande once it was published. The meaning of the report is shorting in the overseas-listed Chinese firms for profit. An original report by Sina Leju follows:

Deutsche Bank thought Citron allegations against Evergrande were invalid and Citron misunderstood clearly the basic operations of Evergrande.

According to the publicly available information, Citron was founded in 2007 and there was only one full-time employee, Andrew Lefort. His profession was shorting in the overseas-listed Chinese firms. The most well known event in China was 4 times of fruitless attacks on Qihoo started in last year.

Since the global financial crisis in 2008, the shorting companies have found many opportunities, to form a single but mature chain, with the purpose to seek excessive profits. The shorting companies, represented by Muddy Waters, because of their manipulation of the stock price, and malignant disruption on the market, have long been considered to have deviated from the value of anti-regulatory, and invested by the government institutes of the US, Canada etc. which are considering systemic solutions.  Full release.

Deception on a Grande Scale