Tuesday’s 9.7% drop in SenseTime shares came after American short seller Grizzly Research claimed the Chinese artificial intelligence company had overstated its revenue.
In Hong Kong, SenseTime shares partially recovered and ended the afternoon session 4.86% down.
A report published on Tuesday by Grizzly Research claimed that SenseTime was involved in a programme known as “revenue round-tripping.”
“SenseTime grants money to consumers either directly or through middlemen, which is then utilised to buy products from SenseTime that may not have been delivered,” according to Grizzly Research. Two Chinese court cases that detailed the strategy were the source of this information, according to the short seller.
SenseTime reacts.
SenseTime claimed that it is “reviewing the claims and considering the proper course of action to take to preserve the interests of all shareholders” in a filing with the Hong Kong Stock Exchange.
“Without merit and including false charges and deceptive conclusions and interpretations,” the Chinese corporation declared in reference to Grizzly Research’s research.
The study “reveals a lack of understanding of the Company’s business strategy and financial reporting structure, as well as a lack of thorough reading of the Company’s public filings,” SenseTime continued.
SensTime claimed in its statement that Grizzly Research did not get in touch with it to confirm the information.
Problems with SenseTime increase
Renowned for its computer vision technology, which powers facial recognition software, SenseTime was formerly considered one of China’s most promising artificial intelligence startups.
On the other hand, the US government has sanctioned the corporation. Washington blocked US companies from doing business with SenseTime in 2019 by adding it to the so-called Entity List. According to American allegations, SenseTime is connected to abuses of human rights in China’s Xinjiang province.
At the time, SenseTime declared that it was “not aware of our technology being used in the Xinjiang region, nor do we have any business in that region.”
Source (CNBC)
