China’s Zoomlion Stock Halted After Report of False Sales


Zoomlion Heavy Industry Science and Technology Co Ltd (OTCMKTS:ZLIOF) (HKG:1157) (SHE:000157) stocks were suspended from trading by Chinese markets in Hong Kong and Shenzhen on Monday after a report from local medial alleged that the company issued wrong sales data, reports Reuters.

China's Zoomlion Stock Halted After Report of False Sales

A report from unidentified Chinese media organization claimed that the construction-equipment firm’s regional manager released false sales numbers for 2012 for central China. As a result, the authorities halted the trade, waiting clarification.

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Similar accusation earlier

In January, Hong Kong’s Ming Pao Daily News made a similar accusation against Zoomlion Heavy Industry Science and Technology Co Ltd (OTCMKTS:ZLIOF) (HKG:1157) (SHE:000157). At that time, the company told in a filing that the allegations against it are false and misleading.

“The allegations relating to the Group’s financial information as reported in the press article are false, groundless and misleading,” Zoomlion said responding to the allegations in January.

Zoomlion Bond & Stock performance

Before the halt in trading on Monday, Zoomlion Heavy Industry Science and Technology Co Ltd (OTCMKTS:ZLIOF) (HKG:1157) (SHE:000157) shares in Hong Kong were down 0.9 percent. Year to date shares of the equipment maker is down almost 31 percent against a 6 percent slide in the bourse’s main index of mainland Chinese companies listed in Hong Kong, the Hang Seng China Enterprises Index.

Zoomlion, China’s second-largest construction equipment maker, $600 million bonds of 6.125 percent due December 2022 fell 2.1 cents on the dollar to 95.4 cents in Hong Kong. The slide in bonds were the lowest since Match 6 and could very well result in the highest daily fall since Feb. 4, analyzes Bloomberg.

Q1 Performance

For the first quarter results announced in April, Zoomlion Heavy Industry Science and Technology Co Ltd (OTCMKTS:ZLIOF) (HKG:1157) (SHE:000157) posted a 71.7 percent drop in the earnings to 591.8 million yuan ($96.52 million). Revenue for the quarter was down 48.6 percent to CNY 5.96 billion and earnings per share came in at CNY 0.08.

China’s heavy machinery segment struggled last year owing to rising inventory level and low utilization rates, resulting from China’s massive stimulus program in 2008. Adding to the fall was the slowest growth of the world’s second-largest economy since 1999, resulting in a weak demand for construction materials.

Zoomlion Heavy Industry Science and Technology Co Ltd (OTCMKTS:ZLIOF) (HKG:1157) (SHE:000157) vice president of the finance department, Hong Xiaoming told that the company will release the clarification today.