NEW YORK (TheStreet) -- Internal auditors of Chinese paper producer and distributor Orient Paper (ONP) have absolved the company off allegations that it had overstated its revenue, according to a Reuters report.

A Hong Kong brokerage firm had accused the company of improper accounting, but an internal audit has cleared it of any wrongdoing, says


According to the report, the internal auditors, reviewing records dating back to Oct. 2009, found no evidence of an alleged misappropriation of $30 million.

The investigation began in July after brokerage firm

Muddy Waters

alleged the company had been overstating its revenues and margins and initiated coverage of Orient Paper with a strong sell rating,



In early November, the brokerage firm had also accused Chinese wastewater treatment company

Rino International


of falsifying its customer relationships, causing the stock to plunge.

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Rino stock has fallen about 67% over the past month.

Shares of Orient paper have fallen by about 37% year to date and are down 8.8% to $6.60 in morning trading.

-- Written by Andrea Tse in New York.

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