CEO says KPMG report vindicates Silvercorp stance

Mon Oct 24, 2011 3:33pm EDT
 
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By Allison Martell

TORONTO (Reuters) - An independent report confirming revenue figures for Silvercorp Metals Inc SVM.TO will let the China-focused company renew its focus on producing silver, the company's chief executive said on Monday.

"I think everybody has been waiting for the KPMG report," Rui Feng told Reuters in an interview. "I hope they have the same view as us, and this report will put this nonsense to an end."

Since September, Silvercorp has spent $2 million fighting to clear its name after an anonymous short sellers accused it of fraud, Feng said, repeating a call for regulators to protect legitimate companies from anonymous attacks.

Asked if the report, commissioned by a special committee looking into the allegations, was a vindication of Silvercorp's repeated insistence that it did not misreport earnings and assets, Feng said: "Yes. That's a fact."

Feng said the KPMG Forensic report, which focused on verifying revenue in China, refutes all of the allegations against the company [ID:nN1E79N0A5]. The short sellers have also made claims about the quality of Silvercorp's assets.

"One thing to detect fraud is cash. If the cash is right, there is no fraud," he said. "The money is there. Where did the money come from, selling mushrooms?"

Feng said the allegations have been a distraction for the management team.

"A lot of people cannot focus. They just wonder, every day, what's going to happen to my company?" he said.

"How can we make these people responsible? I think that's the key thing," he said.

(Reporting by Allison Martell; editing by Janet Guttsman)