Orient Paper listed in the US in 2009 via a reverse takeover. Between March and July 2010, it was attacked by short-seller Muddy Waters which alleged that the company was faking profits, washing the evidence from the financials through overstated capex and fixed assets. A special committee was established to investigate the claims, concluding that they were baseless. Meanwhile, auditor BDO signed-off on the company's financials. As such, the allegations remained unproven. However, articles in the Chinese press questioned the authenticity of Orient Paper's financials and the company's share price fell more than 80% over 2010 and 2011. Furthermore, the company's financials had traits in line with past frauds and unusually large fixed assets relative to sales, in line with Muddy Waters' allegations. As such, Orient Paper is somewhat suspicious. 

Last updated December 2021

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