Chinese mobile Internet service provider NQ Mobile issued a press release today, April 30th, updating the status of their ongoing internal investigation into allegations of fraud. The allegations regarding accounting and operational irregularities equating to fraud at NQ Mobile Inc (ADR) (NYSE:NQ) were made by short-seller research firm Muddy Waters back in October of last year.

NQ Mobile

NQ Mobile Inc (ADR) (NYSE:NQ) shares were almost cut in half after the Muddy Waters allegations, but the stock has bounced back significantly since then.

Allegations of fraud last year

Carson Block of Muddy Waters alleged last year that NQ Mobile Inc (ADR) (NYSE:NQ) was involved in “massive fraud” and furthermore that much of the company’s supposed sales in China were “fictitious.” Block has followed up his initial allegations with further calls for the firm’s auditors to demand  full access to the company’s financial records.

NQ Mobile investigation

NQ Mobile Inc (ADR) (NYSE:NQ) formed an Independent Special Committee shortly after the allegations were made public, including four independent directors of the firm, to undertake a review of the allegations. In November, the company announced that they retained Shearman & Sterling LLP to conduct an independent review of the situation, and that Shearman had retained Deloitte & Touche Financial Advisory Services Limited as forensic accountants.

Update on internal investigation

In Wednesday’s press release, the company highlights that the investigation team has conducted an in-depth investigation of all of NQ Mobile Inc (ADR) (NYSE:NQ)’s business activities, financial records and cash, as well as major business partners in China and elsewhere and major acquisitions, in order to bring to light any evidence regarding the allegations made in Muddy Waters’ October 24, 2013 report and subsequent reports.

The press release also mentioned that the six-month-long investigation is almost finished. Furthermore, NQ Mobile Inc (ADR) (NYSE:NQ)’s management and staff have been fully cooperative throughout the investigation.

Most importantly, the investigation has far found no evidence that the firm engaged in the fraud alleged by Muddy Waters to date. The investigation team has also discussed its work and all relevant evidence with the company’s independent auditor.