SHANGHAI — Shares in China Metal Recycling (Holdings) Ltd. (CMR), which claims to be the biggest scrap company in China, remained suspended for a fourth day Jan. 31 as the company prepared a response to allegations from a U.S.-based research company.

CMR asked Hong Kong Exchanges & Clearing Ltd. (HKEx) to halt trading in its shares on Jan. 28 after Glaucus Research Group California LLC published a 38-page report challenging CMR’s account of the size and scope of its business.

Trading in the company’s shares will remain suspended "until further notice," CMR said.

CMR’s claim to be the largest scrap metal recycling company in China was rejected in the Glaucus report, which set a $0 target for CMR shares and contained a "strong sell" recommendation. The Glaucus report said that Chinese import data and other official information cast doubt on CMR’s claims for the scale of its business.

Glaucus, a California-based investment research group, said it had shorted CMR shares in advance of publishing its claims and stood to gain from declines in the scrap company’s share price.

The Chinese recycling company said that it considered the Glaucus allegations "completely inaccurate and wholly unfounded," and a spokeswoman told AMM sister publication Metal Bulletin that the company would reply to Glaucus’ claims next week.

CMR has since announced that it is preparing a "detailed clarification announcement" with the aim of refuting each of the "groundless" allegations in the Glaucus report.

A version of this article was first published by AMM sister publication Metal Bulletin.