Wednesday, October 16, 2019
 
Columnist
Martin Hennecke

Short targets suffering less
 
11/10/2019
 
<p>More short-seller reports have been published but with less impact on target companies, accounting and consulting firm Grant Thornton says.</p><p>None of the companies facing short-seller allegations this year remained suspended as of August 31, said Grant Thornton partner Barry Tong. But 50 percent of companies attacked by short sellers in 2017 had still to resume trading.</p><p>Short sellers prefer to target big companies, especially those with a market capitalization of over HK$5 billion. That could be because it is more difficult to attack a small-cap firm, with shares predominantly controlled by a few shareholders given the higher cost of borrowing.</p><p>Instead, queries raised by auditors would certainly lead to a trading suspension, Tong said.</p><p>About 91 percent of companies facing auditor challenges in 2019 remained suspended - a growing trend over the years, Tong said. And most had been halted for more than 12 months.</p><p>&nbsp;</p>
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