SEC investigating China’s online video platform “iQiyi” for massive fraud

Allegations on iQiyi have their investors worried as controllers look at claims of expanded profit. iQiyi shares fell 11.6% in pre-market trading on Friday after they uncovered that the US Securities and Exchange Commission had opened an examination concerning its works after following a dubious report asserting enormous misrepresentation at the firm. The organization said it had just started its own inner survey of the cases, and anticipated a positive result.

The report, delivered in April by Wolfpack Research, accused iQiyi of submitting misrepresentation a long time before its IPO in 2018, and proceeding to do as such from that point onward. It asserted that the organization had immensely swelled its income and user numbers, by edges of up to 44% and 60% separately. iQiyi pushed back on the charges at that point, affirming in an explanation that the report contains numerous mistakes, unconfirmed proclamations and deluding conclusions and interpretations.

iQiyi is claimed by Chinese tech organization Baidu, and flaunts a huge number of users, for the most part in China. The organization is known for its profound library of media, including motion pictures and well known TV dramas. The executives revealed the test during an income presentation on Thursday, stating that the organization had been helping out US officials.

On a call with examiners, CFO Xiaodong Wang said that the organization had begun an inside, free survey into Wolfpack’s claims shortly after the report came out. He moved to console investors on Thursday, saying that the organization had developed solid corporate administration in the course of the most recent 10 years.