Download ReportsDecember 5, 2011 - Glaucus Research Group California LLC is initiating coverage on China Medical Technologies, Inc. (NASDAQ:CMED) with a Strong Sell rating.
CMED is a medical device company that manufactures and markets immunodiagnostic and molecular diagnostic products for
the detection of various cancers, diseases, and disorders, as well as companion diagnostic tests for targeted cancer drugs.
A few weeks ago an anonymous short seller posted a blog entry on GeoInvesting’s website alleging that CMED committed
fraud by, among other things, overpaying for acquisitions from undisclosed related parties. We here at Glaucus Research follow
the U.S.-listed Chinese space closely,so we were naturally curious. We decided to investigate the allegations of fraud.1 Here
is what we found.
We believe that the evidence supports the anonymous blogger’s allegations that CMED committed fraud by overpaying for an
acquisition from an entity that appears to be secretly related to CMED’s founder, CEO and chairman. Although we could not
verify all of the claims by the anonymous blogger, there are a host of other red flags to support the notion that CMED is the
next Longtop (LFT) or Universal Travel (UTA).