Sheraton owners’ shares hit after scathing market report
THE Hong Kong-listed owner of the Sheraton Mirage in Port Douglas, a Whitsundays resort development and an Australian daycare chain is “one of the largest stock manipulation schemes trading on any exchange anywhere in the world”, short-sellers Glaucus Research allege.
Shares in Fullshare Holdings plunged almost 12 per cent in a 30-minute spell on the Hong Kong Stock Exchange on Tuesday, April 25, in between the publication of the scathing report by Glaucus and the stock being suspended from trade. Glaucus makes a profit by betting that shares in companies it targets would drop.
Last year Fullshare paid parties related to a senior executive about $108m to buy the Sheraton Mirage and the Whitsundays development Laguna Quays.
It also paid unrelated parties about $81m for Sparrow Early Learning, which owns 28 childcare centres in Victoria and Queensland, with two more Victorian sites listed on its website as “opening soon”.
Glaucus alleges Fullshare sold its most lucrative subsidiary, Fullshare Green Building, which fetched 240m renminbi (about $46m), to a supposedly independent third party last June.
“In sum, we believe Fullshare sold its only material subsidiary in its highest profitmargin segment to an undisclosed related party at a significantly discounted price,” Glaucus said in its 52-page report.
Glaucus also accuses Fullshare of manipulating its stock price by pumping it up in the final hour of trade, along with the share price of another Hong Kong-listed company, Zall Group.
As both own shares in each other this caused the profits booked by both to rise, Glaucus alleges.
A Fullshare spokeswoman in Hong Kong said company management was “out of town”. “Our management acknowledges this but doesn’t have any comment,” she said.
The Sheraton Mirage in Port Douglas, one of Fullshare’s tourism interests