Chinese sofa manufacturer Man Wah originally listed in Singapore in 2005 but moved its listing to Hong Kong in 2010. The company was attacked by short-seller Muddy Waters in June 2017, alleging fraud. Muddy Waters stated that the company had undisclosed liabilities which would seem to imply that losses were held off-balance sheet in order to boost profit at the listed company. The report failed to prompt any board or auditor resignations. Man Wah triggered our Fake Cash Flow Fraud model in FY17 but not our Excess Capital Raising model. This suggests that fabricated profits were not being held on balance sheet. It could be that they were being held off-balance sheet, in line with Muddy Waters' allegations, but this is pure conjecture. The alternative is that Man Wah is just a highly profitable company. The allegations against Man Wah remain unproven.

Last updated October 2021.

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