Feeds

China's tech giants gang up on short seller

Microsoft, SAP and others accuse market analyst Citron of fraudulent practices

  • alert
  • submit to reddit

Boost IT visibility and business value

A group of 60 Chinese entrepreneurs, CEOs, investors and regional heads of global tech concerns including Microsoft and SAP has turned their collective fury on short seller Citron Research, arguing the firm is deceiving the market by finding fault in firms where there is none.

The group launched an astonishing attack on Citron and its founder Andrew Left in an open letter posted to a new blog titled, rather unambiguously, Citron’s Fraud.

It begins thus:

Citron is an ‘investment analysis company’ owned by Mr. Andrew Left, a man with a long record of fraud, deceit, and unlawful behaviour. Citron’s reports take advantage of the information asymmetry between China and the US, and boldly tell lies, knowing that their American readers have no way of verifying them.

We are investment professionals and company founders/executives in China. We are joining together in this effort to expose and condemn the deception and ignorance of Citron and other short sellers like them.

The group says that some negative reports on Chinese companies listed in the US have “helped cleanse the environment”, but the likes of Citron have “started targeting legitimate companies with either no problems or minimal problems”, and told bare-faced lies.

The signatories include Charles Wu, VP IBM Greater China, Hera Siu, president of SAP China, Zhang Ya-Qin, president of Microsoft Asia R&D, Wang Xiaochuan, CEO of search engine Sogou, and Zhou Hongyi, chairman of browser and security giant Qihoo 360.

Another key figure behind the campaign against Citron is Kai-Fu Lee, former head of Google operations in China, who has had run-ins with the short seller before when he slammed a Citron report which was highly critical of Qihoo.

Interestingly, Anonymous Analytics, the research arm of the hacktivist group, recently also exposed what it claimed to be fraudulent activity at Qihoo.

For his part, Left hit back in a blog post, claiming that Lee has a vested interest in going after Citron.

“Kai-Fu Lee has raised $180 million from a group of investors led by none other than Qihoo 360! And none of this relationship has been disclosed in his postings about Citron Research or his postings defending Qihoo 360,” he wrote.

It should be noted, however, that Sohu CTO Wang Xiaochuan also signed the letter against Citron, even though his firm actually came out looking pretty good.

Long time China market watcher Bill Bishop has also questioned the quality of Citron's analysis.

It's certainly true that short sellers like Citron are an irritant. It's also true that any inaccuracies in reports from firms like Citron may cease to be such a major problem if investors were granted greater access to financial data from private Chinese firms. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.