SVM - Silvercorp Metals Inc (TSX) - Page 23

Well we know why the company is down, some gangster shorter in the US, thinking he can pull a MUDDY Waters on SVM and short millions of shares , AND THEN MAKE ALLEGATIONS of fraud.

I hope SVM fries these shorts in court. Or perhaps makes a onetime divvy of .15 to make them pay.

Late yesterday afternoon, the Company was forwarded a copy of an anonymous letter dated August 29, 2011 addressed to the Ontario Securities Commission, the Company's Auditors, and various media outlets maliciously alleging a "Potential $1.3 Billion Accounting Fraud at Silvercorp".   The anonymous author also stated that his firm held a short position in the Company's shares and intended to make his concerns known through internet postings.   The Company has not confirmed whether the letter has been disseminated to all the addressees or if any postings have been made.

SVM is on the move now trying to track down the sender of the letter, and the entity who is shorting them , so they can begin litigation.

The anonymous letter may be hard to prove, however  the short seller should be relatively easy to track down, the trading records are available at SVM's request.

Yes the silver bullion ( and sterling silver) that i bought 4 and 5 years ago, has done every bit as well as the trading account. And a lot less worry and headache.

Sometime i think we are just around to make the banks/brokers rich off all the commissions.

On another note, this was Casey Research thoughts on the dubious anonymous allegations.

As the press release makes clear, Silvercorp has been the target of an unknown group alleging fraud on the part of the company. After reviewing the allegations, Silvercorp's supporting documentation, and speaking with management, here's our take. First, the primary allegation – that the company is losing money when claiming they’re profitable – appears to have no merit. The numbers from this anonymous group exclude income from SVM’s subsidiaries – but you must include them to get a consolidated number. With that, there’s simply no way to reach the negative number they claim. Further, all company financials are audited, including their profits. They also pay one of the highest dividends in the silver industry and are buying back millions of their own shares, something that would be very difficult to do, much less hide, if they were losing money, and would require fraud on a massive scale.

Regarding the allegation of grade “too good to be true,” Louis James of International Speculator has been to the Ying mine – twice – and seen the massive sulfides that bear the high-grade silver on multiple levels. He's seen the direct-shipping ore heaped by the kilotonne, ready to go, as well as the old mill producing at the fastest rate he's ever witnessed. We've not seen the new mill working yet, but Jeff Clark has confirmed his participation on the tour later this month.

We are pleased with management’s response. They told us in no uncertain terms that the allegations are completely false (except for the fact that they own a very high grade silver mine). They are being fully transparent with their financial records and are dealing with the problem head-on. They informed us they’ll be posting a video on their website soon regarding the allegations. They are opening the Ying mine tour later this month to virtually any interested party, something out of the ordinary. They also contacted the authorities immediately, and established a task force to investigate the parties behind the allegations, one member of which includes the former Ambassador to China. Last, they state they will continue buying millions of their own shares, something you couldn’t do if you didn’t have the money. This is all appropriate, reassuring, and frankly, not the behavior of a guilty party.

"We have no reason to suspect Silvercorp has done anything wrong. It appears this is a deliberate attack on the company to profit on existing short positions. Keep in mind that this is not the first time a company operating in China has been targeted by similar tactics; a number of companies have been hit with similar allegations, the most prominent of which was Sino Forest by short seller Muddy Waters last June. These people have clear reasons for circulating false rumours.

What to do? First, do not panic, and do not sell your shares. Given what we know at this point in time, we have no reason to change our opinion of the company. Keep in mind that CEO and Explorers’ League honoree Rui Feng has an incredible track record. Would we buy here? Perhaps, with the caveat that we don’t know how bad the fallout could be and thus how low the shares could go. Given the enormous short position in the stock, they could fall lower – but at some point many of those positions will unwind and force the stock higher. If you have a full position, we recommend simply holding to your shares until this settles; if you have room in your portfolio to add or initiate a position, we think this could be a fantastic opportunity. In the interests of full disclosure, members of Casey Research and/or the Casey Fund may be buying shares in the next few trading days, and maybe even selling some puts as a short-term speculation."

 

Yes rocketting it is, and i got caught swinging the entire lot. Did not see the 10% jump today and held very strong, not the big intraday swings we have seen, Perhaps shorts are getting very nervous here.

Company standing behind the stock, and latest is CEO Rui Feng buying shares.

Silvercorp Metals Inc. (SVM)