(Yicai Global) Jan. 11 -- Chinese courier ZTO Express Cayman Inc. said accusations that it overstated its profit margins to lure investors are baseless.
"We don't think those allegations have any merits," CNBC quoted ZTO Chief Financial Officer James Guo as saying at the Morgan Stanley China Technology, Media and Telecomm Conference in Beijing. "We'll defend ourselves rigorously. We have engaged US lawyers to help us, to protect the rights of the company."
The Birmingham Retirement and Relief System filed a lawsuit against the Shanghai-based delivery firm and its initial public offering underwriters last year for exaggerating margins to entice backer.
The pension fund alleges the investment banks failed to undertake adequate due diligence for the IPO, which raised USD1.4 billion in October 2016. The organization said that ZTO excluded certain low-margin segments of its business from its financial statements to attract investors.
ZTO is a household name in China. Its key customers include e-commerce giants Alibaba Group Holding Ltd. and JD.com Inc.
With the lawsuit under way, volume growth at ZTO has outstripped the industry average in China, Guo said, without citing numbers. Processing over 100 million orders on Double 11 last year put the logistics business among domestic leaders, said Guo.
Singles' Day, or Double 11, which started as an obscure counter-Valentine's Day protest, has since morphed into China's Black Friday-style online consumption carnival. It takes place annually on Nov. 11.