March 28, 2024

Silvercorp says its books are clean

VANCOUVER – Silvercorp Metals Inc. (TSX:SVM) says an investigation commissioned by the company’s special committee has found its accounting and financial reporting are accurate, despite allegations by short sellers to the contrary.

The Vancouver-based miner said Monday that a report from KPMG Forensic Inc. confirms that its cash and short-term investment balances reported on Dec. 31, 2010 and March 31 of this year “were substantially correct.”

“The special committee has advised the board that in its view the findings of the forensic review support the integrity of the company’s accounting system and financial reporting in China and North America,” the company said in a release.

Silvercorp said the full report will be delivered to the British Columbia Securities Commission, the Toronto Stock Exchange and the New York Stock Exchange.

Shares in Silvercorp have been under pressure since an anonymous letter dated Aug. 29, that was addressed to the Ontario Securities Commission, the company’s auditors and various media outlets accused the company of a potential $ 1.3-billion accounting fraud.

The company responded by posting more than 90 pages of accounting and other financial information on its website to disprove the allegations and has said it was going ahead with an earlier plan to hold an investor tour of its Ying mine in China later this month.

Silvercorp also noted an increase in the short position against the stock. Short sellers profit when the price of a stock falls.

A second anonymous letter raised questions about the company’s production at its mines in China, ore grades and sales to related parties. The company pointed to taxes and dividends paid to dispute those allegations.

None of the allegations against the company have been proven.

The company has said that the RCMP, the B.C. Securities Commission, the U.S. Securities and Exchange Commission and the FBI are all trying to identify the anonymous authors.

Local news from metronews.ca/vancouver

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