Bloomberg reported that Winsway Coking Coal Holdings Limited, which processes and transports coal to China from Mongolia, denied allegations from a short seller that imports were less than the company reported and inventories were overstated.

Mr Jerry Xie CFO of Winsway Coking Coal said that "This report is dead wrong. Winsway is absolutely not a fraud, as was alleged in a report from Jonestown Research."

Scrutiny of accounting standards of Chinese companies intensified in June 2011 when short seller Carson Block's Muddy Waters LLC alleged Sino Forest Corporation overstated its assets and cash. Short sellers have targeted other Chinese companies including vegetable producer Chaoda Modern Agriculture Holdings Limited and software maker Longtop Financial Technologies Limited.

Mr Shirley Zhao, an analyst at Mirae Assets Securities Co in Hong Kong, wrote that "We believe the management has provided reasonable explanations to handle the fraud accusation this time." Mr Zhao maintains a buy rating on the stock and a target price of HKD 3.63.

Mr Jonestown doesn't publicly disclose its contact information, InvestDOOR, the website that published the Jonestown Research report, said in an e mailed response to Bloomberg. InvestDOOR doesn't research or analyze companies, it said.

The publisher said "We do ensure that the research published is clear, well supported and actionable."

Mr Xie said that Winsway will proceed with its planned purchase of Canadian metallurgical coal producer Grande Cache Coal Corporation. It agreed in October 2011 to buy the miner with Japan's Marubeni Corporation for CAD 1 billion to take advantage of surging demand from steel producers in China.

(Sourced from www.bloomberg.net)