Evergrande accused of fraud and bribery Shares in Evergrande, one of China's largest property developers, tumbled on Thursday after a US shortseller accused the company of fraud, bribery, and reckless spending on football teams. Los Angeles-based Citron Research alleged in a 57-page report on its website that Evergrande has "abused the capital markets" and "represents the worst of Chinese neo-capitalism." Evergrande's shares closed down 11.4 per cent on Thursday, having fallen as much as 20 per cent, and leaving the company with a market capitalisation of $7.6bn. In a statement to the Hong Kong stock exchange, Evergrande said the allegations that it "used accounting tricks and bribes to hide the fact that it is truly insolvent" were "untrue." The Guangzhou-based company added that it would respond to the allegations in more detail "in due course." Evergrande, which owns Guangzhou Evergrande Football Club, plans to build a Chinese soccer academy for 10,000 youngsters in co-operation with Real Madrid, the Spanish league's title-holders. Citron's founder Andrew Left has attacked more than a dozen Chinese groups in the past five years. Like others including Carson Block of Muddy Waters, he bets against the shares of his targets in order to profit when they fall. Gillem Tulloch, head of Hong Kong-based research house Forensic Asia and an expert on Chinese property developers, said the Citron report raised important issues. "Some of the claims do seem to be unsubstantiated and speculative and they've painted the company in the worst possible light," he said. But they bring up some valid points. The Citron report suggested that Evergrande has increased its assets 23-fold since 2006, five times faster than its peers, was a red flag. It alleged that the group was able to acquire its vast land bank at a 67 per cent discount to its peer group by paying bribes to local officials. In October 2011 Evergrande was fined by China's Ministry of Finance for providing inaccurate information in its 2009 financial report. The developer said at the time that the irregularities came from its Guangzhou unit and had been rectified in the 2010 statement. "These shortsellers tend to go after companies that already have a bit of a stink and this one does," said Owen Gallimore, credit strategist at ANZ. Evergrande has about $2.8bn of bonds outstanding. On Thursday in Hong Kong, its $1.35bn of 13 per cent bonds due in 2015 fell by about 7 percentage points to 82 cents on the dollar.