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Cogobuy plunges as trade resumes, denies short seller allegations
May 31, 2017 / 6:27 AM / 4 months ago

Cogobuy plunges as trade resumes, denies short seller allegations

HONG KONG, May 31 (Reuters) - Shares in Chinese e-commerce platform Cogobuy Group fell over 20 percent on Wednesday, its first day of trade after the stock was suspended last week following a critical research report that accused it of improper accounting.

Blazing Research, a little-known research firm whose analysts were not identified, first issued a report last week accusing Cogobuy of improper accounting practices and saying that its platform, which sells electronic components, has minimal traffic.

Cogobuy late on Monday rejected the report, saying the allegations were false and misleading. It said Blazing Research had not sought comment from the company.

It added that it had reported the incident to the Shenzhen police and reserved all rights to take legal action against the authors of the report.

Blazing Research issued an additional report on Tuesday, rejecting Cogobuy’s rebuttal.

After initial gains, shares in Cogobuy plunged 26.3 percent to HK$5.75 on Wednesday to their lowest since Aug. 25, 2015. Since the report was first published, Cogobuy has lost over 40 percent of its value. (Reporting by Donny Kwok; Editing by Clara Ferreira-Marques and Edwina Gibbs)

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