Muddy Waters on July 2 released a new report claiming that the tutoring services provider had inflated its revenue "by 2 times to 3 times or more" when it acquired Beijing-based learning center Firstleap in 2016.
Muddy Waters also pointed out in the new report that TAL's response to the first part of its allegations did not address any of the issues that it raised. It criticized the company's 51-word statement regarding the results of the internal probe it conducted in response to the accusations, saying there was "no attempt to convince investors there was any investigation."
TAL recently completed the internal review of the previous claims made by Muddy Waters, concluding that it did not find any evidence to support the allegations mentioned.
In a July 3 statement, TAL said: "Similar to the initial allegations made by the same short seller in June 2018, the additional allegations are based on erroneous conjectures and assumptions."
However, the Chinese education services firm said its board, together with its audit committee, still intends to review the allegations and "will consider appropriate actions to protect the interest of its shareholders."
Muddy Waters said it plans to release another report about the "fraud in the financials" of TAL's core business, Peiyou.