MILAN (Reuters) - Shares in Italy’s Bio-on (ON.MI) fell 50% and were immediately suspended from trading on Thursday after U.S. hedge fund Quintessential Capital Management raised fresh doubts over the bio-plastics company’s accounts.
In a statement, its third in the past 24 hours, Bio-on denied accusations of accounting irregularities and fictitious revenues made by Quintessential - a fund which has said it has an economic interest in the price movement of Bio-on’s shares.
Quintessential, however, said the statement by the company failed to address its criticism, adding it would publish new documents in coming days.
Shares in Bio-on did not trade at the open on Thursday morning and only began trading around 1000 GMT when they immediately tanked, triggering another suspension. They were indicated down 75% at 12.5 euros by 1056 GMT.
Bio-on reiterated a position it first issued on Wednesday in response to Italian media reports that had picked up the Quintessential allegations, triggering a 10% fall in its shares.
Bio-on, which says its customers include Italian high-end furniture brand Kartell and consumer goods giant Unilever (ULVR.L) (UNA.AS), said the news circulating about the company and its managers was untruthful, adding it had begun measures to safeguard its image but gave no details.
Italian market watchdog Consob is looking into Bio-on share movements, a source close to the matter said, adding it was a normal move when a stock behaved erratically.
In its report, Quintessential called Bio-on “a massive bubble based on flawed technology and fictitious sales thanks to a network of empty shell companies”..
Bio-on is listed on the AIM market, an unregulated segment of the Italian stock exchange dedicated to small and medium-sized companies.
The company, which before the allegations had a market capitalization of just over 1 billion euros ($1.1 billion)produces what it says are environmentally-friendly plastics for the agri-food, design and cosmetics industries.
Quintessential is a New York-based hedge fund which says it specializes in exposing corporate wrongdoing.
Last year, a report by the fund into Greek jewelry maker Folli Follie led to an investigation from Greek authorities, the resignation of the company’s founders and the firm seeking protection from creditors.
Reporting by Giulio Piovaccari, editing by Silvia Aloisi and Emelia Sithole-Matarise