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9 13 12 Citron Retraction Demand

9 13 12 Citron Retraction Demand

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Published by: citronresearch on Sep 13, 2012
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3 Park Plaza, Suite 1100Irvine, California 92614-2592(949)623-7200 (949)623-7202Faxwww.jmbm.comMark S. AdamsDirect: (949) 623-7230Fax: (877) 407-2757MarkAdams@jmbm.com
September 12, 2012
Bai Wentao
, Founding Partner, Share Capital
Chen Datong
, Managing Partner, West Summit Capital
York Chen
, Managing Partner, IDTech Ventures
Cadol Cheung
, Founding Partner, Fuel Capital
, Founder & Chairman, Kiina Ventures
Kai-Fu Lee
, Chairman & CEO, Innovation Works
Li Yunlong
, TusPark Ventures
James Mi
, Managing Partner, Lightspeed Ventures
Gavin Ni
, Managing Partner, Zero2IPO Ventures
Lawrence Pan
, Founding Partner, China SageWater Capital,Inc.
Xu Xiaoping
, Managing Partner, Zhen Fund
Charles Xue
, Angel Investor
Andy Yan
, Founding Partner, SAIF
Raymond Yang
, Founding Partner,WestSummit Capital
Ye Don
, Tsing Capital
Charles Yen
, Vice Chairman, Vincera Capital
Jeffrey Zeng
, Senior Managing Director, Citic Capital
Zhou Wei
, Partner, Kleiner Perkins Caufield & Byers
David Zhang
, Managing Partner, Matrix Partners
Allen Zhu
, Partner, GSR Ventures
Feng Jun
, Chairman & CEO, Aigo
Gong Haiyan
, Founder & Co-CEO, Jiayuan.com
Alan Guo
, Chairman & CEO, Lightinthebox.com
He Boquan
, Founder, Le Bai Shi (Robust)
Jiang Tao
, President, CSDN
Ricky Lei
, CEO, Hinge Software
Li Ya
, COO, Phoenix New Media
Alvin Liu
, Chairman & CEO, A8 Music Holdings, Ltd.
Richard Liu
, Chairman & CEO, 360Buy.com
Liu Wei
, President, Giant Interactive
Niu Wenwen
, President & Chief Editor, EntrepreneurMagazine
Hera Siu
, President, SAP China
Song Jun
, Tsinghua Ziguang Group
Sun Taoran
, Chairman & President, Lakala
Tan Zhi
, Former President, Focus Media
Wang Xiaochuan
, CTO of Sohu.com and CEO of Sogou
Charles Wu
, Vice President, IBM Greater China
Nick Yang
, co-Founder, Kongzhong
Yang Xiangyang
, Chairman, Yuanzheng Ventures
Yu Minhong
, Chairman & CEO, New Oriental
Zhang Ya-Qin
, President, Microsoft Asia R&D
Zhou Hongyi
, Chairman &CEO, Qihoo 360
Bao Fan
, Chairman & CEO, China Renaissance
Chen Hong
, Chairman & CEO, Hina Group
Wang Ran
, Chairman & CEO, eCapital
Henry Yang
, Chairman & CEO, iResearch
Dai Kun
, CEO, Comhui.com
Huang Guangming
, CEO, Manboker
Lai Weixiao
, CEO, Seeyoo
Evan Shen
, CEO, Byban
Song Yanlin
, CEO, Nanothink 
Wang Yu
, CEO, Shanghai Yuking Chemtech Co. Ltd
Xie Lei
, CEO, Ormita Commerce Network 
Xi Ming
, CEO, Hunan Century-Express
Xu Hailing
, CEO, Kiel Technology (HongKong) Ltd
Zeng Weijing
, CEO, Tmimi
Zeng Zhaoxia
, CEO, Cheeris
Vinson Zhang
, CEO, Heroitte Analytics
Zhao Pu
, CEO, O.C.T.mami
Zhao Xuesong
, CEO, Mowidi
Allen Zhao,
CEO, Earth&People
Zhou Xiang
, CEO, Kancart
Zhu Nathan
, CEO, Suzhou Langran Network Technology Co.Ltd
Zuo Lei
, CEO, ThinkLand
Re:Citron Research Demand for Apologyand RetractionDear Sirs and Madams:This firm represents Citron Research in connection with your defamatoryletter/communication published on or about September 3, 2012, “condemning” Citron. In yourcommunication, published on the website “citronfraud.com”, and quoted extensively in the pressin China and the United States, you have falsely accused Citron of lying, deceiving, anddefrauding investors.
September12,2012Page 2In your communication, you make the following untrue and unfounded statements,among others:“However, recently some of these “China Short Sellers” [referringto Citron] started targeting legitimate companies with either noproblems or minimal problems. Their reports wouldtakeadvantage of the information asymmetry between China and theUS,
 and boldly tell lies, knowing that their American readers have no way of verifying them.
and other short sellers’ recent
efforts to
slam legitimatecompanies and
 deceive investors
are despicable.”“We are joining together to
exposeand condemn the deception
 of Citron
and other short sellers like them.”“This English website (citronfraud.com) is being created to hostthis
 ongoing fight against fraud 
.”Your statements are libelous, and are damaging to Citron Research’s reputation. Youhave flagrantly misstated Citron’s history of fact-based reporting and analysis.Contraryto what you stated, Citron has accurately reported on risky Chinese businesses.Citron’s reports are intended to bring, and have brought, transparency to the markets (whichmight involve exposing questionable accounting practices, exposing situations where stocks areovervalued based on a lack of information, or explaining company-provided information thatmight be misleading or misunderstood by investors). As to any particular company, CitronResearch writes its report, investors focus on the issues Citron raises, and the investors make adecision to buy, hold or sell, based on the information that is provided by both the company andCitron. That this transparency might have led to lower stock prices for certain subject companiesis plainly a reflection of the market’s valuation of those companies with better and moreunfiltered information.Over thepast six years, Citron Research has researched and published reports on some 20Chinese companies, all but one of which have traded on United States exchanges. Citron’sreports have saved potential investors hundreds of millions of dollars which would have beenlost byinvesting or continuing to hold investments in certain companies that, since Citronreported on them, proved to be ruinous investments. Of the 20 or so Chinese companies thathave been the subject of Citron reports, sixteen have since suffered stock loss values rangingbetween 66% to 100%, and two more are since trading below the price at which they weretrading when Citron reported on them. Seven of these companies have been delisted, and in thecase of three companies, the auditors detected fraud during the audits. Out of all 20 companieson which Citron reported, only two have higher stock prices than when Citron reported on them.One of those two, Harbin Electric (HRBN), went private, and HRBN’s stock price did increase at

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