Muddy Waters Research report saves shareholder case against China’s biggest real estate brokerage | Reuters

In their motion to dismiss, the shareholder case, KE’s counsel urged Woods to disregard claims based on the Muddy Waters report because, among other things, Robbins Geller failed to conduct an independent investigation to corroborate the short seller’s accusations.

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In this case, he said, the Muddy Waters report on KE wasn’t based just on anonymous sources. The short-seller developed computer programs to crunch publicly available data from KE’s platform, then sent out investigators to verify its data-based suspicions about how many stores and brokers were actually using the platform. Muddy Waters also used Chinese government data to raise doubts about the number of KE employees in key real estate markets.

This report, in other words, did not merely recite unsubstantiated allegations from anonymous whistleblowers, Woods said. Muddy Waters included data analysis, photographs, screenshots and transcripts to back its assertions. The short-seller’s evidence, the judge said, amounted to “sufficiently reliable support” for shareholder’s claims.

Source: Muddy Waters Research report saves shareholder case against China’s biggest real estate brokerage | Reuters