Emily Margitan's Comm 101 Blog

Vancouver based mining company Silvercorp Metals Inc. (SVM-T) was accused of misconduct in a report by Alfred Little. Silvercorp’s mine, Ying, in the Henan province of China, was discovered to have artificially increased its production levels, raised its grade of sliver and didn’t reveal that its main buyer is a related party. Silvercorp opposed accusations of a $1.3-billion accounting fraud that resulted in their shares dropping 20 percent to a price of $6.20 on Tuesday. On September 2^nd they posted links to financial reports and statements on their website to regain public trust. This small move will definitely not help them get out of their financial trouble as according to Mr. Block of Muddy Waters, “it seems there are a number of people looking at the company”.

Based on this article Silvercorp has a severe honesty problem specifically in the accounting sector. This could be a result of this being an international company based in Vancouver but with a mine in China leaving a large distance for information to be changed. Any company, large or small, can be hurt if they are not honest, for corporations are only as good as their reputation.

http://www.theglobeandmail.com/globe-investor/silvercorp-stung-by-report-on-china-mine/article2164718/