LT - I got the quote from the Bloomberg article below:
Kim Titus email to Bloomberg
(Updates with company response in fourth paragraph.)
By Ye Xie
May 15 (Bloomberg) -- NQ Mobile Inc., the Chinese mobile-
service provider accused by short seller Carson Block of
overstating revenue, dropped as much as 30 percent after
delaying the filing of its annual report for the second time.
American depositary receipts of NQ Mobile fell to $7.99 at
11:30 a.m. in New York, their lowest level in 10 months. The
shares had tumbled 55 percent through yesterday since Block,
founder of Muddy Waters LLC, said in October the Beijing-based
company was “a massive fraud.” NQ Mobile has denied the
allegation.
“The company is unable to file on time its annual report
on Form 20-F because it needs additional time to complete it,”
Beijing-based NQ Mobile said in a statement today. “The company
continues to work to file its annual report for the year ended
December 31, 2013 as soon as possible.”
NQ Mobile is still working with auditors on a review of its
financial statements, which “has thus far found no incident of
fraud” and is “nearing its conclusion,” Kim Titus, a
spokesman for the company, wrote today in an e-mailed response
to questions on the filing delay.
The company on April 30 delayed the filing of its audited
annual report, known as a 20-F, by 15 days as it waits for the
final results of an investigation into Block’s allegations. The
company said at the time it doesn’t anticipate any changes to
its previously reported financial results and it didn’t provide
an update on the investigation in today’s statement.
Investigation
“The market was expecting something and they didn’t get
anything,” Sachin Shah, a special situations and merger
arbitrage strategist at Albert Fried & Co. in New York, said in
a phone interview today. “No data is negative data. I am
surprised by their comments that they need more time. We are
supposed to have the filing today. It further undermines their
credibility.”
Block, who has become known over the past years for
exposing illicit practices in Chinese companies, didn’timmediately respond to a request for comment on the filing
delay.
Investors have been waiting for the result from the
investigation led by law firm Shearman & Sterling LLP and
auditor Deloitte & Touche Financial Advisory Services Ltd. as a
ruling on whether Block’s assertion that NQ Mobile
misrepresented its financials has merit.
“NQ is working tirelessly with the external auditors to
finalize the audit expeditiously and it is nearing its
conclusion,” Titus wrote in the e-mail. “As we stated on April
30, the investigation has thus far found no incident of fraud;
this will have no impact on previously reported financials.”