Montage Technology Group Ltd (NASDAQ:MONT) shares have recovered slightly today after a disastrous report was issued on the company yesterday. Even still though, they remain down by about 11% in the wake of a report which alleges that the company is a fraud. But what’s especially interesting about Montage right now is who’s investing in it: namely, Intel Corporation (NASDAQ:INTC) and Jim Oberweis of Oberweis Asset Management, who also favors another controversial company—NQ Mobile Inc. (ADR) (NYSE:NQ).

Montage Technology

Gravity calls Montage Technology a fraud

The report which sent Montage Technology Group Ltd (NASDAQ:MONT) stock into a downward spiral came from Gravity Research, a relatively unknown firm. Gravity believes that the Chinese fabless semiconductor company is committing fraud and that its actual revenue is “significantly lower” than what it has reported to investors. The firm states that there’s “overwhelming evidence” that Montage’s biggest distributor is “nothing more than a shell company used to help fabricate” Montage’s financials.

The report goes on to stay that LQW Technology Company Limited allegedly makes up 71% of Montage Technology Group Ltd (NASDAQ:MONT)’s revenue in the first nine months of last year. That’s an increase from 50% in 2012, and the firm states that LQW is “secretly 100% owned by Shanghai Montage Microelectronics Technology Co. Ltd.,” and “undisclosed entity established by” Montage and a Montage employee. The extensive report appears, on the surface, to be pretty damning, and it took Montage a while to get around to responding, but it finally did today—only in part, however.

Montage responds to Gravity’s report

In a press release, Montage Technology Group Ltd (NASDAQ:MONT) said it “believes that the allegations and accusations in the report lack merit and contain numerous errors of fact, misleading speculation and misinterpretation of events.” The company states that its financial statements have been independently reviewed by its accounting firm PricewaterhouseCoopers Zhon Tian LLP. The company also disclaims Gravity’s suggestions that LQW is one of its affiliates and said it would release more information refuting the allegations made by Gravity “in due course.”

Oberweis likes Montage

But whatever you think of Gravity’s report, Montage has some interesting investors. Jim Oberweis of Oberweis Asset Management wrote in a post on Forbes last month that he favors Montage Technology. He also told the media last month that they doubled their stake in NQ Mobile Inc. (ADR) (NYSE:NQ) to 1.8 million shares.

Of course NQ Mobile has been the focus of an attack from short selling firm Muddy Waters, which claims it is a fraud. So it appears like we could say that Gravity Research is attempting to “pull a Muddy Waters” on Montage Technology Group Ltd (NASDAQ:MONT). Some would undoubtedly find it interesting that Oberweis likes both NQ and Montage—two now-disputed technology companies based in China.

Intel discloses stake in Montage

On the other hand though, Montage Technology Group Ltd (NASDAQ:MONT) has a pretty prominent investor in Intel Corporation (NASDAQ:INTC). Regulatory filings with the Securities and Exchange Commission show that Intel disclosed a 6.4% stake in Montage as of the end of December. Indeed, this comes as no surprise when digging a little further back in Montage’s history.

According to a press release on Montage’s site, Intel Capital, Intel’s venture capital investing arm, was one of the two leaders of the second round of financing back in 2006. In fact, Intel Capital is listed as the actual owner of the stake in Montage on the SEC filing, and as a subsidiary of Intel Corporation (NASDAQ:INTC), Intel owns those shares indirectly.

SEC filings also show that Montage Technology Group Ltd (NASDAQ:MONT) did another stock offering last month not long after Intel bought its latest batch of shares.

DISCLOSURE: I have no stake in any of the companies mentioned.