Chinese AI company SenseTime has been accused of overstating its financials

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Shares in Chinese artificial intelligence technology company SenseTime fell 9.7 per cent after claims by US short-seller Grizzly Research that the firm overstated its financials.

Here's What We Know

Grizzly Research claims that SenseTime is using a so-called "revenue circumvention" scheme. The company allegedly provides customers with funds, which they then spend on buying SenseTime products. Some of these supplies may be fictitious.

SenseTime has denied Grizzly Research's allegations, calling them baseless and based on a misunderstanding of the company's business. It said the short-seller had not sufficiently examined the public documents and financial statements of the company.

SenseTime was previously considered one of China's most promising AI companies. However, in 2019, the firm was sanctioned by the US due to its alleged involvement in human rights abuses in China.

This has limited SenseTime's growth potential in the global market. New allegations of earnings manipulation could further erode investor confidence.

Source: CNBC