New Oriental responds to stock turbulence, SEC probe

Updated: 2012-07-20 17:09


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Yu Minhong, board chairman of the New Oriental Group, responded to the company's stock turbulence on Thursday, news website reported.

New Oriental Education & Technology Group Inc shares went up 17.89% on Thursday, but two days earlier, on July 17, it lost 34.32% after it released its Q4 earnings report.

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Yu said the probe by the US Securities and Exchange Commission (SEC) into the structural adjustment of Beijing New Oriental Education & Technology (Group) Co Ltd, a domestic variable interest entity (VIE), combined with fraud allegations from short seller Muddy Wasters, led to the plunge.

The VIE structure is widely used by overseas listed Chinese companies.

Yu said the ups and downs of stocks do not affect the management and operations at the company, which is now in good status. But he kept silent on details about the SEC’s investigation and only said that New Oriental would actively cooperate.

"We would never undermine investors' interest under the VIE structure," Yu responded to Muddy's allegations.