Italian bioplastics company Bio-On on Wednesday denied allegations of accounting irregularities by US hedge fund Quintessential Capital Management, saying it was considering legal action against the fund.
Bio-On shares were suspended from trading for excessive volatility and were indicated down 10.3 percent after the allegations, included in a report dated July 19 and posted on QCM’s website, were picked up by Italian media on Wednesday.
QCM said in the report it had an economic interest in the price movement of Bio-On shares, which typically means it has a short position on the company’s stock.
In a statement, Bio-On said it “completely denies allegations of wrongdoing by its management and that the company is providing false information to the market.”
In its report, QCM called Bio-On “a massive bubble based on flawed technology and fictitious sales thanks to a network of empty shell companies.”
Bio-On produces what it says are environmentally friendly plastics for the agri-food, design and cosmetics industries and has a market capitalization of just over 1 billion euros.
Last year, a report by QCM into Greek jewelry maker Folli Follie led to an investigation by Greek authorities, the resignation of the company’s founders and the firm seeking protection from creditors.