(Yicai Global) Oct. 9 -- Chinese beverage firm Tibet Water Resources Ltd. [HKG:1115] has hit back at short seller Iceberg Research, which accused the company of financial data fraud, by saying its allegations were unfounded and that it will be taking legal action.

Iceberg released a short report online on Oct. 4, claiming that Tibet Water's profit from beer is unreasonably high. The company also hides advertising costs and shareholders continue to reduce their holdings, the report added. It also queried the purpose of the firm's overseas borrowing, National Business Daily reported.

Tibet Water's highland barley beer business ranks first industry wide, with profit margins at 57.6 percent, Iceberg quoted the firm's annual report for 2016 as saying. However, field inspections show the beer brand can't be found in local markets and is unavailable on China's major e-commerce platforms.

The firm released two statements on Oct. 4 and Oct. 6, advising that Iceberg's allegations are unfounded. The agency aims to sell their short positions on stocks to profit through false and misleading allegations, Tibet Water added.

The beverage maker will firmly defend its investors' legitimate rights and interests and is ready to file a lawsuit against Iceberg, it said.