Silvercorp Metals’ (TSX:SVM) saw its share value edge upward Wednesday after it responded to a second set of fraud allegations.
The accusations, published by Alfredlittle.com, allege the Vancouver-based mining company has misreported production and resource estimates at its mines in China, and that its sales came from “two questionable” customers, among other things.
Silvercorp didn’t waste any time responding to the allegations, publishing a 23-page report on its website countering all of the allegations.
“I ask shareholders to exercise common sense in assessing whether these allegations of ‘fraud’ against the company have any merit whatsoever in the face of very significant revenues, tax payments and dividends, and particularly when the accusations are made anonymously by parties whose only interest is in depressing the company’s share price,” said company chairman Rui Feng.
The allegations come two weeks after the company received an anonymous letter that claimed the company hadn’t accurately reported its financial statements. (See “Silvercorp rejects fraud allegations” – BIV Business Today, September 2.)
Although the allegations levelled against Silvercorp have yet to be proven, the company’s share value has dropped 13% since the first anonymous complaint was acknowledged.
Silvercorp said the RCMP, the B.C. Securities Commission, the FBI and the Securities and Exchange Commission were attempting to determine the identity of the anonymous report authors.
“I invite the authors of the anonymous allegations to come out of the shadows and participate with the regulators in their investigations, if their concerns truly extend beyond the profitability of their short positions,” said Feng.
At press time, Silvercorp’s shares were valued at $6.43.
Joel McKay
Twitter:jmckaybiv