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. ®