China Sky Fights Back With Letter to Holders
On Friday, the maker of traditional Chinese medicines released a letter written by its chairman and CEO, Yanqing Liu.
The letter, addressed to China Sky's shareholders, defended the company against a series of fraud allegations made by short-sellers based in the U.S. Uppermost among the allegations are that the company has reported inflated sales figures in its financial filings with the Securities and Exchange Commission.
China Sky One's fight with one short-seller, a retired businessman in Texas named John Bird, was documented on TheStreet in a story published last month. Bird's contretemps were also featured some weeks later in an article in Bloomberg Business Week. Since late December, China Sky's stock has fallen sharply, losing 25% of its value.But, on Friday at least, Liu's letter appeared to give the stock a boost. China Sky's shares were gaining 5.3% to $5.55 at 12:10 p.m. on volume of about 400,000 shares. Daily turnover averages about 180,000 shares. Though it failed to address any of the specific allegations made against the company over the last year, Liu's letter was strongly worded. The chairman asserted that "in the Company's history, our executive directors have never sold a single share of China Sky One Medical."
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