Citron, a well-known foreign short-selling institution, began to pay attention to Evergrande Group as early as 2009 and conducted in-depth research on it. At that time, Evergrande Group was in a period of rapid expansion, and its main business covered real estate, sports, finance and other fields.
However, in the course of its research, Citron found that there were anomalies in the financial statements of Evergrande Group, and its sales and profit levels were well above the industry average. This aroused the suspicion of Citron, and they began to dissect the financial reports of Evergrande Group in detail.
After an in-depth investigation, Citron found evidence of Evergrande Group's fraud. First, Citron found that Evergrande Group had inflated its sales through related party transactions, thereby increasing the company's market value. Secondly, Evergrande Group uses financial leverage to expand the scale of investment through borrowing, thereby improving the company's profit level. In addition, Citron also found that Evergrande Group had a large number of irregularities in the process of land purchase and project development.
Once the Evergrande Group fraud incident was exposed, it attracted great attention from the market. On the one hand, the incident had a significant impact on Evergrande Group's share price, causing its market value to shrink significantly. On the other hand, this incident has had a profound impact on the entire real estate market in mainland China, triggering the attention of regulators to the integrity of the industry. In addition, the Evergrande Group fraud incident has also prompted the mainland government to increase the supervision of corporate financial reports and improve the company's sense of integrity.
In the process of exposing Evergrande's fraud, Citron also faced many challenges and difficulties. First of all, during the investigation, Citron was strongly counterattacked by the Evergrande Group, and the other party tried to cover up the truth through various means. Second, because Citron is a foreign-owned institution, it was subjected to a certain degree of political pressure during the investigation. In addition, Citron also needs to face legal risks in the process of exposing fraud, such as being sued by Evergrande Group.
Despite the difficulties, Citron still firmly exposed the fraud of Evergrande Group, providing strong support for the integrity construction of mainland enterprises. Citron's investigation report not only revealed the financial fraud of Evergrande Group, but also reminded other companies of the importance of operating with integrity. This incident has an important enlightenment and contribution to the construction of creditworthiness of mainland enterprises, prompting enterprises to consciously abide by laws and regulations and establish correct values.
In conclusion, Citron plays an important regulatory role in the international capital market, and its disclosure of Evergrande Group demonstrates its determination to defend market justice. Through accurate analysis of financial reports, Citron revealed the fraudulent behavior of Evergrande Group, which played an active role in promoting the integrity construction of mainland enterprises. In the future development, Citron will continue to pay attention to the financial status of listed companies and contribute to maintaining the order of the capital market.