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Fraud claims at Kandi deal new blow to Chinese listings in US

Short-seller questions electric-car maker's sales while SEC readies new rules

Nasdaq's MarketSite building in New York City's Times Square. Nasdaq is a favored destination by Chinese companies looking to list in the U.S.   © Reuters

SHANGHAI/BEIJING/NEW YORK -- A recent spate of accounting irregularities at U.S.-listed Chinese companies grew this week with allegations against electric-vehicle maker Kandi Technologies Group, even as regulators move to ramp up scrutiny.

U.S.-based Hindenburg Research released a report Monday local time accusing Kandi of falsifying sales, asserting that its largest customer, representing about 55% of so-called "last 12 months" sales, "shares a phone number with a Kandi subsidiary, and shared an executive with Kandi." The short-selling firm also pointed to frequent changes in chief financial officers and auditors as a possible sign of fraud and combed through its past results and future plans for evidence.

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