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HONG KONG, April 26 Shares of some firms tied to Chinese property and healthcare group Fullshare Holdings fell on Wednesday after short-seller Glaucus Research claimed trading in shares of two companies was manipulated and questioned their financial health, allegations that the firms denied.
Shares of property and logistics services company Zall Group Ltd, which holds a 3.45 percent stake in Fullshare, fell more than 3 percent on Wednesday. Fullshare, in turn, holds more than 8 percent of Zall Group.
Glaucus, in a report on Tuesday, had queried Fullshare's stock trading patterns, its valuation and asset disposals. The report said Fullshare was "one of the largest stock manipulation schemes trading on any exchange anywhere in the world".
California-based Glaucus, which has shorted Fullshare, also made allegations about Zall in the report.
Fullshare said in a statement to the Hong Kong stock exchange late on Tuesday that the report was "misleading" and that it would refute any attempt to undermine confidence in its business and financial conditions.
Zall Group said in a separate statement on Wednesday that it was not aware of any circumstance suggesting its stock price was being manipulated as alleged by Glaucus, and an accusation that it was "a deeply troubled company" was unfounded.
Fullshare's stock, which was suspended on Tuesday after it plunged 11.9 percent, had surged nearly 800 percent in the 17 months to September last year. They then gave up a chunk of the gains.
Shares of Huarong International Financial Holdings Ltd fell as much as 4.5 percent early on Wednesday. Huarong International Financial is owned 33 percent by China Huarong International Holdings Ltd, which owns 13.4 percent of Fullshare.
China High Speed Transmission, whose top shareholder is Fullshare, fell 0.7 percent after dropping as much as 8 percent on Tuesday.
Shares of China Huarong Asset Management, which dropped as much as 11 percent on Tuesday, were up more than 5 percent on Wednesday. Huarong Asset Management is the second-largest shareholder in Fullshare. (Reporting by Donny Kwok; Editing by Anne Marie Roantree and Muralikumar Anantharaman)