Short-seller, Blue Orca published a report in July 2022 attacking Chinese gift retailer, Miniso. It made several allegations including that the company controlled many of its franchises and was extracting cash via related-party transactions. The short-seller claimed that various company employees reportedly owned franchises as the underlying business was too unattractive for independent retailers to consider. As such, it was likely that profits had been faked with the evidence parked as fabricated cash balances. Miniso issued a rebuttal a few days after the initial report and set up an “Independent Committee” to conduct an investigation into the allegations. The company subsequently announced in September 2022 that this investigation, which was assisted by professional legal and accounting advisers, had concluded that the key allegations were not substantiated. Miniso’s FY22 financials were signed off by its auditor, KPMG. Therefore, we find the allegations are unproven.
Last updated May 2023