Library

Industrials

Lihua International Inc. (LIWA US)

Year: 2011

Copper products manufacturer, Lihua International, listed on the NASDAQ via a reverse merger in 2009. In August 2011, it was attacked by short-seller Absaroka Capital alleging fraud, followed by short-seller Kerrisdale Capital later that same month. However, the reports did not seem to have a lasting impact on the company's share price. Three years later, in April 2014, short-seller GeoInvesting highlighted a Chinese news article which alleged that Lihua was in financial distress but this was somehow not reflected in its financials. Subsequently, Lihua's share price collapsed. The next month, the company's CEO resigned. In June, the NASDAQ moved to de-list the company in the public interest. In August, Lihua announced that its financials could not longer be relied upon and a subsequent investigation (September) revealed that the company had substantially overstated assets and equity. The company triggered our Fake Cash Flow Fraud model since its FY07 financials. It is a confirmed fraud.

Last updated November 2021

The information on this page has been compiled from publicly available sources. GMT Research Limited has not verified the information and does not warrant its accuracy. Any claims made or views expressed are not necessarily those of GMT Research Limited.

lock03 Read More

Back