Nearly a decade ago, Andrew Left took a look at Chinese real-estate giant Evergrande Group and realized the numbers didn’t add up. Literally, in fact: According to the short-seller, the company was insolvent.
Fast-forward nine years, and wouldn’t you know it, but Evergrande is not only apparently insolvent but also the most heavily-indebted company in the world, and Left’s fellow short-sellers are feasting. Of course, to do so would be to skip over why Left himself is not: He’s banned from trading in Hong Kong for accusing Evergrande of being insolvent, and the authorities there do not seem eager to let him off early (the ban expires in two months) for, you know, being right.
“I got a complete black mark on me for saying everything that’s already turned out to be true,” he said. “It’s Hong Kong’s attempt to stifle the truth. They knew it was going to happen, but they didn’t need a short seller to say anything about it….”
“I am not vindicated because I’m still banned,” he said.
The regulatory ban has made it harder to raise money for his Citron Capital hedge fund. “It affects you huge. Huge, huge, huge, huge,” he said. “It’s a disclosure you have to make.”
The ban also hurts his reputation elsewhere. “You don’t want your kids to read, ‘Your dad was telling lies about companies in China.’ I wasn’t.”
In fairness to the Hong Kong authorities, they’re a bit preoccupied at the moment. And while he calls his Evergrande report “probably the most documented piece I’ve ever written,” even he admits his research could have been a bit more thorough.
At the time Left published his research, he was unaware that Evergrande CEO Hui Ka Yan was one of the richest and most well-connected people in China.
“I didn’t know any of this... I would have never gotten into it,” he said.
Andrew Left Was Banned From Trading in Hong Kong for Saying China Evergrande Group Was Insolvent. Was He Right All Along? [II]
Two more suppliers say payments are overdue from indebted Evergrande [Reuters]
Short sellers double bets against China Evergrande’s bonds [FT]
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