Jesse Glickenhaus'  Instablog

In February and March 2011, short sellers began posting allegations of fraud against the fertilizer company China Agritech.  In the begining of March, 2011, the investment firm Glickenhaus and Company sent me, Jesse Glickenhaus to meet with managment and visit the company's stores and its Anhui factory.  The company told me to take pictures and video, and to talk with anyone I wanted, which is exactly what I did.  There is no question the company has stores, and that's its Anhui factory is running.  The short sellers, including a so-called Lucas McGee research (who has not returned my communication for over a month), as well as John Hempton of Bronte Capital, both wrote things that were blatently untrue, and we feel showed a reckelss disregard for the truth.  Furthermore, John Hempton sent an email to the then auditor Ernst and Young, as well as people at Carlyle Group, a major shareholder of the company, threatening to all the company a fraud after the signed 10-K audit report was released.  He further wrote in the email that he was "friends with a couple of class action lawyers (you know the scummy ambulance chaser types)."

I have published a full description of my trip including photographs, as well as detailed descriptions of the short sellers allegations, and photographs that disprove those allegations.  That, as well as a copy of John Hempton's email which we belive is thretening and libleous, are all contained in the report, a PDF copy of which can be found on the link on the main page our website. 

Glickenhaus.com

It is in the main banner under the heading "Jesse Glickenhaus visits China Agritech: Read his write-up"

I have also shot, editted, and narated video footage into a 5-6 minute video of of the company's stores and Anhui factory.  This will be posted on youtube and a link will be posted on the website glickenhaus.com by March 29, 2011.

As John Hempton wrote in a Bronte Capital Blog on February 9, 2011 (http://brontecapital.blogspot.com/2011/02/china-agritech-follow-up.html)

"If... you do not find the plants you have not proved the short case - the plants could be somewhere else - or closed for a reason - or you could have the address wrong or any other similar snafu.  It is hard - nay impossible - to prove a negative."

He also wrote...
"In this case, if you find the plants and you count the trucks entering and leaving the plants with amounts of fertilizer on them consistent with the company filings you have proved the existence of the company and disproved the short case."

price). It is clear that neither of the short sellers made a legitimate attempt to contact the company or request a tour of facilities, and of course they could not see equipment in a plant when they were standing outside of locked gates.

These reports are equivalent to someone who shows up to the Metropolitan Museum of Art on a Monday, looks around the outside of the building at the locked gates, and concludes that the museum is a scam, doesn’t have any

valuable art, and is not actually open to the public. It is clear from our experiences contacting the company and requesting a visit with the company, its distribution centers, and its factories, that had either of these short sellers made a legitimate effort to meet with the company, they would have found all the products, distribution centers, and functioning factories that they couldn’t seem to find by poking around China on their own."


Sincerely,

Jesse Glickenhaus
Glickenhaus and Company
546 Fifth Avenue
New York, NY 10036