By Reuters 2015-07-17 14:38:35
China LNG Group Ltd lost as much as a third of its market value as trading in its shares resumed for the first time since U.S.-based Glaucus Research described the firm was “a startup without any proprietary intellectual property”.
By the midday trading break, China LNG shares were down 18.5 percent at HK$1.19, but recovered from a day-low of HK$0.99. The company was still heading for their steepest decline since July 8, when Hong Kong stocks suffered its largest one-day drop since October 2008.
“The company siad that the malicious and misleading allegations made in the Glaucus report are totally without merit and absolutely not supported by any evidence,” China LNG Chairman, Kan Che Kin, said in a statement Thursday.
The report was the latest from an independent researcher questioning corporate practices of firms. In February, Iceberg Research criticized the accounting at Singapore-listed Noble Group, which sparked a stock selloff that wiped around $1 billion commodity traders’ value.
In Hong Kong, Citron Research is facing legal action from the Hong Kong’s securities regulator for a report about Evergrande Real Estate Group Ltd misleading.
China LNG requested the suspension of the trading of its shares on July 14, when the stock was at HK$1.46 after Glaucus began research coverage with a strong sell recommendation.
The Glaucus’ report said China LNG had no meaningful operating business or tangible experience in the industry and should be valued at or very close to its book value of HK$0.08 per share.
China LNG is a property and securities investment group that recently diversified into liquefied natural gas (LNG) related businesses.
In its statement Thursday, China LNG said the content of the report was incorrect and inappropriate. It also stated that it was seeking legal advice and could take legal action against Glaucus.
China LNG said the claim its senior management had no experience of the energy business was “completely misleading” as its strategy is to establish strategic cooperation with experienced market players.
“No matter what any investor believes about China LNG’s future plans, potential relationships, or long-term chances, the simple fact remains that today, in its current form, the company’s operating business is tiny and insignificant,” Glaucus said in response to China LNG’s statement, in an email to Reuters on Friday.
“If China LNG wants to be considered an energy company, it should be valued at or close to book value, like other energy companies,” Glaucus said. (Reporting by Denny Thomas and Donny Kwok; Editing by Kenneth Maxwell and Christopher Cushing)
This post was sourced from Maritime Executive: View original article here.