Carson Block: Tutoring Company The Perfect Marriage Of Chinese, American Fraud

TAL Education Group has really been hitting the books on how to screw people.
(P. Morgan)

(P. Morgan)

After some missteps in the U.S. and Germany, noted short-seller Carson Block is returning to a land where he never has to look far to find some cooking of books or other nefarious doings: China. And boy, has he found a doozy, if he does say so himself. TAL Education offers after-school tutoring and the like, and is worth something on the order of $20 billion, on account of the many millions of newly-economically-empowered striving Chinese parents seeking every advantage for their little ones. Oh, and—according to Block, anyway—on its own brilliant synthesis of traditional Chinese overstatement with one of the finest scams America’s ever invented. Truly, this is a globalist racket par excellence, in his rather considered opinion.

Estimates indicate Tal has overstated net income by at least 43.6 percent for the last two fiscal years, Block's firm Muddy Waters said in a release Wednesday.

"TAL combines the old school China fraud playbook of simply penciling in more favorable numbers with the more sophisticated asset parking fraud of Enron," the short seller added in a report.

Short seller Carson Block compares hot China stock Tal Education to Enron; shares dive [CNBC]
Short-seller Carson Block targets TAL Education [FT]