Rising e-commerce platform Pinduoduo, which gained a $33 billion valuation after its debut earlier this year, has been accused of fixing financial reports, according to a report by a US activist fund.
The Tencent-backed company, which has faced previous scandals involving the listing of counterfeit goods on its website, was called out in a 42-page report by Texas-based Blue Orca fund for making losses up to 65% greater than those reported.
Pinduoduo has denied the claims made in the report. “PDD notes that Blue Orca report which contains a series of incorrect suppositions,” said the company. “PDD is announcing its quarterly results on Tuesday 20th November and we will address the issues raised at that time.”
Blue Orca, managed by ex-Google engineer Colin Huang, also clarified in the report that it holds a short position on Pinduoduo, and that “we will make money if the price of PDD stock declines.”
Rumours of dodgy bookkeeping by Pinduoduo are not entirely new. One analyst told the Financial Times: “I have heard PDD was cooking its numbers before they were listed.”