Summary of Second Preliminary Ruling Before MMT Proceedings Against Activist Short Seller Andrew Left

For Immediate Release. February 23, 2016.

February 23, 2016. Hong Kong – Timothy Loh LLP represents activist short seller Andrew Left as firm client pursues second application to limit scope of evidence after the Market Misconduct Tribunal (MMT) dismissed his first application to enquire into Evergrande’s true financial position.

The application was dismissed as the MMT took the view that where the evidence, regardless of its provenance or timing, was probative as to whether Andrew Left disseminated false or misleading information through his report based on public information available at that time, it would be considered by the MMT.

The MMT then gave examples of the kind of evidence it would consider, such as

(i) evidence of reaction to the Report by other analysts or market commentators,

(ii) evidence of reaction by Evergrande itself,

(iii) evidence of reaction by Evergrande’s auditors and the basis upon which they questioned Mr. Left’s analysis, and

(iv) expert evidence seeking to demonstrate that Mr. Left’s analysis was false or misleading.

However, the MMT saw no need to consider evidence as to whether Evergrande was in fact solvent and whether it had not in fact engaged in fraud.

Managing Partner of the firm, Timothy Loh, comments, “We disagree that any evidence after the release of the report should be considered on the issue of whether the report itself was false or misleading as to do so could result in liability upon a person commenting on a company’s disclosure being proven wrong by matters disclosed after his comments had been issued. On this basis, The firm disagrees with the rulings of the MMT.


Updated on August 23, 2016

In August 2016, the MMT found Mr. Left culpable of market misconduct in that 

(i) his allegations in respect of Evergrande were false or misleading, and 

(ii) he was reckless or negligent in making those allegations.

However, there was no finding by the MMT that Evergrande was in fact solvent or that it had not in fact engaged in fraud. In reaching its determinations, the MMT simply took the view that Mr. Left’s analysis was unsound as it displayed an ignorance of the Hong Kong accountancy standards and prevailing accounting practices used by PRC property developers.

Timothy Loh LLP will continue to represent Andrew Left as firm client pursues right to appeal.



Andrew Left and Evergrande

On June 21, 2012, Mr. Andrew Left (“Mr. Left”), a private investor based in the United States, posted an analytical report (“Report”) on Citron Research (, an online stock commentary website led by him. In the Report, Mr. Left expressed his opinion that Evergrande Real Estate Group Ltd (stock code: 3333) (“Evergrande”), a company in the PRC property sector and listed on the Stock Exchange of Hong Kong, was insolvent and had consistently presented fraudulent information to the investing public. The Report comprehensively detailed the evidence and analysis Mr. Left relied upon in reaching his opinion.

In December 2014, the Securities and Futures Commission (“SFC”) commenced proceedings against Mr. Left before the Market Misconduct Tribunal (“MMT”). The SFC alleged that Mr. Left, through his Report, had disseminated false or misleading information to the market contrary to s. 277 of the Securities and Futures Ordinance in that Evergrande was not insolvent and had not consistently presented fraudulent information (“SFC Case”).

First Application to Enquire into Evergrande’s True Financial Position

On the basis of the SFC Case, the central issue for determination by the MMT would be whether, contrary to Mr. Left’s opinion in the Report, Evergrande was in fact solvent and that it had not in fact engaged in fraud. Therefore, in September 2015, Mr. Left applied to the MMT for an order that Evergrande be required to produce to the MMT documents and records in its possession to facilitate an enquiry into its true financial position.

However, in October 2015, the MMT dismissed Mr. Left’s application. The MMT took the view that as the SFC’s “clarified” case was limited to the assertion that Mr. Left created false or misleading information out of what was publicly known about Evergrande at time he posted the Report, the MMT needed only to determine Mr. Left’s culpability based on the information available in the public domain at that time, and that it needed not ascertain the true financial position of Evergrande.

Summary of First Preliminary Ruling Before MMT Proceedings Against Activist Short Seller Andrew Left

Second Application to Limit Scope of Evidence

On the understanding that Mr. Left’s culpability would be determined only on the basis of public information available at the time he posted the Report, Mr. Left made another application to the MMT for an order that the MMT should refuse to consider any evidence arising after the publication of the Report.