Setting the Record Straight on Silvercorp Metals
Particularly in this post-Lehman, post-Madoff financial world, where rightfully cautious investors are eager to minimize risk, the shorts have it made.
I consider it a sad sign of the times that a company is forced to take seriously even those allegations brought forth by an anonymous party. But particularly where companies with operations in China are concerned, that is certainly the current reality. Successful silver miner Silvercorp Metals (NYSE: SVM ) found itself in just such a predicament last week, and I applaud the company for moving swiftly to rebut the contents of the allegations Friday with a press release backed by 268 pages of supporting documentation. Reacting to a major surge in short interest to reach 13% of shares outstanding, the company responded to an anonymous letter alleging accounting fraud and other alleged irregularities.
While I will leave the final verdict to the forensic accountants and translators that I suspect will continue to pore over those myriad documents and filings, I did manage over the course of my own review of the company's comprehensive rebuttal to emerge from the process with my long-standing confidence in the stock well intact. I will be maintaining my own personal holding of Silvercorp shares, and I encourage my readers to seek their own comfort level in the documentary evidence provided.