Noah Holdings, JD.com Exchange Accusations Amid Camsing Scandal
The wealth management firm filed lawsuits against both Camsing and JD.com, alleging JD backed Camsing's contracts.
The scandal involving China's Camsing International (HKEX: 2662), whose leader Ching Lo has been arrested recently on suspected fraud, continued Tuesday after the giant JD.com and wealth manager Noah Holdings threw accusations at each other in relation to the incident.
Noah Holdings Ltd. (NYSE: NOAH), one of China's largest wealth managers, has filed a lawsuit against Chinese e-commerce giant JD.com Inc. (Nasdaq: JD). Noah claimed that JD's entity, Beijing JD Century Trade Holdings Ltd., backed a $490 million asset management product that came in in danger of default.
The product was involved in "supply chain financing involving third-party companies related to Camsing," Noah said in a Monday statement. This was after Camsing's chairwoman Lo was detained and the company's accounts frozen.
Jingbo Wang, Noah's chief executive officer and co-founder, said in an internal memo this week that the product's duration will be extended by up to one year for repayment, according to Bloomberg.
JD has denied any involvement with Camsing, which allegedly falsified contracts, as reported by Chinese media. A spokesperson at the e-commerce giant condemned Noah's case to Chinese media and said the accusations damaged JD's reputation.
When the incident surfaced on Monday, shares in Noah plunged 20 percent to $35.60 per American depositary share. On Tuesday, the company saw an additional 2 percent drop to $34.85 per ADS.
Noah has also filed a lawsuit against Camsing.
The stock in JD recovered by the end of the day to $30.75 per share, up 18 cents, after a dip to $30.29 in early trading.