Citron Research founder Andrew Left was feeling a modicum of vindication on Monday, as China’s Evergrande looked to be on the brink of collapse, sending shock waves through financial markets.Back in 2012, Left accused the prominent property developer of engaging in aggressive accounting practices and charged that it was actually insolvent, based on his research.
“Nothing has changed in the 10 years since that research … I just identified when the problems started,” Left told MarketWatch. “So, they are going to do whatever they have to do” to contain the harm to the broader economy and limit spillover, Left explained. He said that investors here, however, aren’t likely to observe the wheels within the Chinese machinery moving because of Beijing’s tendency to operate behind a veil when it comes to business matters.
Left believes that a likely intervention by China in Evergrande will limit any spillover, preventing potentially harmful ripples throughout global markets, he speculated. “They’ll just take more control of it,” Left said of China’s government regarding Evergrande. “It’s not a contagion event,” he said.
“I got a complete black mark on me for saying everything that’s already turned out to be true,” he was quoted as saying in Institutional Investor last month. “It’s Hong Kong’s attempt to stifle the truth. They knew it was going to happen, but they didn’t need a short seller to say anything about it.”
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