UPDATE: CCC fashion refutes findings of Ningi Research report, considers legal action

"After a quick preliminary reading, we deny the claims contained in the Ningi Research report. In particular, the data concerning the impact of wholesale to MKRI (Worldbox) on the group's results are completely untrue – the key claim of the report is pure manipulation, significantly deviating from the facts," CCC stressed in the statement sent to PAP Biznes.

The group stated that "this is a typical situation of highly coordinated actions supporting short positions of aggressive speculative investors who have open short positions on CCC shares, which may be closing at this point." As the company pointed out, this is a situation similar to that experienced by listed fashion retailer LPP.

"The report contains false information, particularly with regard to MKRI. Without MKRI's support and franchise agreement with CCC, MKRI would probably have gone bankrupt, as we described in detail in our application to Poland's antitrust and consumer protection regulator UOKIK," CCC pointed out.

"The Group intends to acquire a controlling stake (we are only waiting for the UOKiK's consent), and in the meantime, it cooperates with this company based on our brand (Worldbox) and a detailed franchise agreement securing the interests of CCC and the security of cooperation," it added.

CCC stated that it is considering taking legal action against the authors of the report in connection with the dissemination of false information that manipulate the share price.

The group said it would analyse the report and respond to it in detail within the next 24 hours.

Earlier on Thursday, Ningi Research, which specialises in forensic accounting, announced that it had taken a short position on CCC shares. According to Ningi's report, CCC is a "façade built on aggressive accounting games, undisclosed related-party dealings, and a large-scale channel-stuffing scheme."

Authors of the report claim that evidence suggests CCC is concealing its operational shortcomings by "selling" hundreds of millions in unwanted inventory to a captive, insolvent franchisee called MKRI. Ningi Research believes this scheme artificially inflates CCC’s reported revenue and profitability even though the cash from these sales never materialises.

The CCC share price reacted sharply to the Ningi Research report. Shares fell by approximately 9 percent, and at around 12:00 local time, the CCC share price was down by approximately 6.2 percent to PLN 144.50 (EUR 33.99), with high turnover of approximately PLN 300 million (EUR 70.56 mln).

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