TAL Education Group (NYSE: TAL) issued a statement today saying it has completed an internal review of allegations raised by short-seller Muddy Waters and found “no evidence” in their support.
The shares of TAL Education rose more than 3 percent to $38.28 per share in early trading Tuesday.
Muddy Waters Capital LLC released a report earlier this month, where it claimed that the company, a K-12 after-school tutoring provider based in Beijing, has been overstating its profits and falsely reporting business transfers for at least the past two years.
At the time, TAL Education rebutted the allegations, saying the report contained errors and speculation. Today, the company said only that its internal audit team concluded the review finding no evidence that would support the claims. Its audit committee of the board of directors, the company said, “reviewed the result of the investigation and concurred with the conclusion that the allegations were baseless.”
The company also released its annual report on Tuesday, which showed its revenue for the fiscal year through February grew 60 percent year-over-year to $832.7 million. Net income attributable to its shareholders was $198.4 million, a 70 percent increase from a year ago. Earnings per American depositary share were 34 cents.
Muddy Waters said the second part of the report on TAL Education, presumably, with more allegations, is forthcoming. The short-seller did not say when it would the release the report, or what information it would contain.
The share of TAL Education were trading at $38.28 per share, up 3 percent Tuesday morning.
(Source: Thomson Reuters Eikon)