Aluminium manufacturer China Hongqiao listed on the Hong Kong Exchange (HKEx) in March 2011. It was attacked by an anonymous short-seller in November 2016 alleging that the company was faking profits which were being washed out of the financials via capex and acquisitions. In February 2017, short-seller Emerson Analytics published a report, reiterating the prior claims and adding that losses were being kept off balance sheet through undisclosed related parties. In March, it was announced that Hongqiao's auditor Ernst & Young requested more time to complete the FY16 audit in light of the claims which led to the suspension of the stock. It then transpired in April that Ernst & Young could not agree on the scope of the investigation with the company which let to its resignation. Baker Tilly was briefly appointed auditor before handing the baton to ShineWing in July. Hongqiao published a detailed rebuttal to Emerson's report in October, published its financials and resumed trading. Following a fourth report from Emerson later in October, Hongqiao persuaded a Hong Kong court to issue an injunction against the short-seller. The allegations against Hongqiao remain unproven. 

Last updated September 2021

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