HK magazine article gives Asian Citrus the pip

Chinese orange grower Asian Citrus has hit back at what it claims is an inaccurate article in a Hong Kong magazine renowned for its investigations into alleged fraudulent activities by listed Chinese companies.

Hong Kong-based Next magazine has cast doubts on the accuracy of Asian Citrus's claims viz land ownership, fruit production and the value of its plantations, prompting a detailed rebuttal from the AIM-listed orchard owner.

The farming group maintained that it "has very efficient and comprehensive internal control systems to measure and audit its plantations' production and corresponding revenue," and thus stands by the figures shown in its company reports.

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As for ownership of the plantations, Asian Citrus said it leased the land for plantation from the farmers collective in accordance with the People's Republic of China (PRC) Rural land Contact Law, and has properly registered all the leases of Hepu Plantation and Xinfeng Plantation with the corresponding Land Bureau.

The company said it has obtained the true copy of the State Administration of Industry and Commerce (SAIC) filings of Litian Xinfeng, a subsidiary of the company in the PRC, for the year ended 31 December 2008, 2009 and 2010 directly from Ganzhou SAIC and the financial information obtained in the SAIC filings is in agreement with the management accounts, the statement from Asian Citrus said.

Shares in Asian Citrus, which have virtually halved over the last year as the company became tainted by its association with scandal-wracked fertiliser supplier Chaoda Modern Agriculture, fell as low as 36p on Tuesday in the wake of the Next magazine article, before recovering to 38.875p, down 2.875p on the day.

In October of 2011 the company announced its intention not to renew the fertiliser contract with Fujian Chaoda Group when it expires on 30 June 2012.

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