SINGAPORE (May 9): Best World has issued a statement that says it “strongly refutes” an April 24 short seller report by Bonitas Research, where it alleged the group’s sales in China are a fraction of what was reported to its shareholders, among other issues raised in the report which the group insists are untrue.

It adds that Best World and its co-founders have commenced defamation proceedings against Bonitas and its founder in the High Court of Singapore.

See: SGX RegCo queries Best World; expects full independent review

Contrary to what Bonitas’ report suggests, Best World says it did not limit the scope of its latest independent review of its 2018 China franchise operations nor fabricate its FY2017 sales figure, calling such allegations “absurd” and “entirely incorrect”, respectively.  

The group also denied conducting direct selling of its skincare products in China; fraud allegations regarding its founders and their dividend entitlements; or that its management secretly controlled its primary import agent.

“Bonitas is a professional short seller and has openly stated in the report that it would profit from the decline in the Company’s share price. The company strongly urges its shareholders and potential investors not to be deceived by the Report, which has undermined confidence in the group and destroyed the value that the company has created for its shareholders over the years,” emphasises Best World in its May 9 filing.

Separately, the group has announced earnings of $10.3 million for the 1Q ended March, up 79% y-o-y from its earnings of $5.8 million due to higher revenue, which more than doubled to $53.4 million from $24.6 million a year ago.

Shares in Best World last traded at $1.62 before the April 24 trading halt, post a 9% tumble of the price on Bonitas’ short-sell report. The group has requested to lift the trading halt today.