New York – In a path well known to SinoForest – a Chinese timber company accused of fraud, Chaoda Modern Agriculture – a Chinese agriculture firm, has been accused of engaging in one of the largest and longest running frauds in the Hong Kong Exchange. Judging from SinoForest’s experience, Chaoda’s stock faces interesting times. But what is really interesting in this story is Chaoda’s accuser, Anonymous Analytics.
Anonymous Analytics is an information provider recently launched by anonymous computer-savvy individuals. It is a faction of Anonymous, a “hacktivist” group that combines political expression and computer hacking making the headlines worldwide. For example, in support of WikiLeaks Anonymous digitally attacked MasterCard and Visa when they stopped processing donations to WikiLeaks. Anonymous’ actions have motivated dozens of arrests (many of them of teenagers) in the US and Europe in the last few months. Nevertheless, the movement seems to retain robust support worldwide.
Anonymous Analytics’ website indicates that it is a “decentralized network of individuals promoting access to information, free speech and transparency.” It intends to upgrade its activism from the political level to the corporate one in order to expose companies that engage in fraudulent activities. It claims to have among its members a number of accountants, statisticians, lawyers, analysts, and technology experts who contribute to the legal collection of information.
The 38-page report includes charts, tables, equations pictures, and text that support Anonymous’ claims: that Chaoda Modern’s history is plagued with lies and corporate fraud. The report concludes that Chaoda has overstated its cash balance and falsified its financial statements. Furthermore, Chaoda’s management benefited financially from risky activities which ultimately harmed shareholders.
In an interview with the Financial Times, Anonymous Analytics “We would love to take the next Madoff, but we have to make sure our reach doesn’t exceed our grasp. We also hope that our work will encourage individuals who have information, but are either too scared or don’t have the investigative network we have to approach us. We have a secure dropbox on our website for anyone that wants to tip us. “