AppId is over the quota
AppId is over the quota
Shares of Vancouver-based Silvercorp Metals Inc. gained more than 17 per cent Monday after a forensic audit found the company's books to be accurate.
Its stock closed at $9.60, up $1.42 on heavy volume on the Toronto Stock Exchange, after rising by more than 20 per cent earlier.
The investigation followed allegations from short sellers that the firm had committed fraud.
A report from KPMG Forensic Inc. confirmed that its cash and short-term investment balances reported Dec. 31, 2010, and March 31 of this year "were substantially correct," the company said in a release.
Silvercorp said the full report will be delivered to the British Columbia Securities Commission, the Toronto Stock Exchange and the New York Stock Exchange.
Silvercorp is the largest primary silver producer in China with four silver-lead-zinc mines at the Ying mining camp in Henan Province and is preparing to apply for a permit to develop a silver-lead-zinc mine in northern British Columbia.
Its shares fell 30 per cent over five days in September after an anonymous letter to the Ontario Securities Commission accused the company of a potential $1.3-billion accounting fraud.
The allegations followed a scandal at Chinese forestry company Sino-Forest, which has been accused of exaggerating its sales and assets.
Sino-Forest, once the most valuable forestry company listed on the Toronto Stock Exchange, came under regulatory scrutiny after short-seller Muddy Waters Research alleged the company was a fraud.
The Ontario Securities Commission has since filed a cease trade order against the company and Sino-Forest chief executive Allan Chan has resigned as chairman and chief executive, but remains founding chairman emeritus.
None of the allegations have been proven.
In September, Silvercorp said it had noted an increase in the short positions in its stock.
Short sellers borrow a company’s shares and sell them, hoping to profit when the price of a stock falls by repaying the loan with cheaper shares.
A second anonymous letter raised questions about the company's production at its mines in China, ore grades and sales to related parties. The company pointed to taxes and dividends paid to dispute those allegations.
None of the allegations against the company have been proven.
Silvercorp Metals has filed a lawsuit in New York against several companies and individuals for spreading lies about the company as part of a short-sell manipulation scheme.
The company has accused Chinastockwatch.com, Jerry Katz, Alfredlittle.com, Alfred Little, Simon Moore, and several "John Doe" defendants of spreading "false, defamatory and fraudulent" information about the company on the internet and in letters to the media and regulators in order to drive down its stock price.
With files from The Canadian Press
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