Shares in Japan's Itochu hemorrhaged overnight, after the trading house was targeted by California-based short seller Glaucus.
Glaucus alleged that it had inflated its profits, particularly in relation to a $1.5bn investment in a Columbian coal mining assets. It said that Itochu hadn't booked any losses on this, despite turmoil in the thermal coal industry.
The company's shares tumbled more than 10 per cent in Toyko, before ending the day down 6.3 per cent.
Itochu said that it follows proper accounting procedures, while its financial statements had been audited by Deloitte Touche Tohmatsu.
Thanh Ha Pham, an analyst at Jefferies, subsequently denounced the Glaucus report as sensationalistic, pointing out that these issues had been raised before and had been priced into Itochu's shares.
Itochu's net profit fell 20 per cent to ¥240.4bn in the 12 months ended March, dragged down by losses in its metal and mineral division.