Viceroy Research has published new information to back its short bet on Japanese solar panel company Abalance, whose stock is down 26% since the short seller’s report came out earlier this week.
Viceroy said on Wednesday that Abalance is relying on a Vietnamese entity to circumvent U.S. duties and warned this model would be hit by ‘‘crippling’’ restrictions next year. The report also suggested the Vietnamese firm is behind schedule on a key project and alleged that Abalance’s supply chain is connected to companies linked to forced labor practices.
Abalance rejected the allegations in a rebuttal later the same day. Abalance insisted all its partners are fully compliant with U.S. laws and regulations, suggested work at the solar panel manufacturing is progressing well, and said allegations about its Chinese suppliers sourcing materials from forced labor camps are ”completely unfounded.”
On Thursday, Viceroy came out with a follow-up, saying Abalance was specifically identified by a U.S. Department of Commerce (DoC) investigation as a company that circumvents anti-dumping and counter vailing duties. The short seller added that Abalance in its response acknowledged concerns that solar panels made by the Vietnamese firm are non-compliant and will be barred from import starting June 2024.
Viceroy also said that its data on the Chinese suppliers of Abalance’s Vietnamese partner are ‘‘specific and detailed’’ so cannot be rejected by the Japanese company. In the initial report, Viceroy said some of the Chinese firms have ties to forced labor camps in Xinjiang.
In a new post Friday, Viceroy claimed to have uncovered ”numerous undisclosed related party transactions” at Abalance. The short seller said its research suggests that Abalance management and their associates from failed China Sunergy Group, the former owner of Abalance’s Vietnamese partner, have been embezzling assets and money from Abalance shareholders.
Abalance shares surged 18% Friday in Tokyo after falling nearly 40% in the previous two sessions in the wake of Viceroy’s attack.