China Yurun shares hit by Muddy Waters rumors

Shares of China Yurun Food Group (1068.HK) saw their largest-ever drop Monday on investor concerns that the meat processor would be the next target of short-seller Muddy Waters, Reuters reported. Yurun said in a Hong Kong stock exchange statement that it did not know what sparked the 20% fall in its shares and that business operations were normal. Muddy Waters has been at the forefront of a group of short-sellers that have published reports alleging that Chinese companies trading on North American exchanges had cooked their books. Yurun’s chairman Zhu Yicai said the company’s auditor PriceWaterhouseCoopers has never expressed reservations about its financial reports. The strong market reaction on Monday was partly due to comments from brokerage Mirae Asset Securities, which said there have been “talks in the mainland about Muddy Waters trying to issue a report on one mainland company. The market is betting that it will be on Yurun.”