(Adds short-seller report, company response, context)
HONG KONG May 18 Hong Kong shares in AAC
Technologies dropped as much as 11 percent before
being suspended on Thursday, after short-seller Gotham City
Research published its second report in about a week accusing
the Apple Inc supplier of "dubious accounting".
Gotham City Research, which has a short position in the
stock, on Thursday gave examples of what it said were more than
20 related party suppliers owned or managed by AAC CEO's family
members or employees that the company did not disclose in order
to overstate its profits.
Asked for comment on the Gotham City report, an AAC
representative said the company was preparing a statement.
Last week, AAC Chairman Koh Boon Hwee vigorously denied
Gotham City Research's findings, saying they were inaccurate and
AAC's stock was suspended on Thursday afternoon after
trading as low as HK$81.25 ($10.44). The Hong Kong Stock
Exchange did not give a reason for the suspension.
AAC's stock has fallen 26 percent since the first report
came out on May 11.
Shenzhen-based AAC is a maker of miniaturised acoustic
components including speaker boxes, speakers, receivers and
microphones. Apple is one of its main clients.
The group was founded in 1993 by current CEO Benjamin
Zhengming Pan and his wife Ingrid Chunyuan Wu, a non-executive
director, who together own 40.34 percent of the stock, according
to AAC's annual report.
AAC last week posted a 72 percent profit jump to 1.06
billion yuan for the first three months of the year on 66
percent revenue growth.
($1 = 7.7844 Hong Kong dollars)
(Reporting by Sijia Jiang and Anne Marie Roantree; Editing by
Clarence Fernandez and Randy Fabi)