Muddy Waters Rips Focus Media...Again

Muddy Waters, the now notorious research firm that focuses on controversial Chinese stocks, is out with another report today on Focus Media

, a stock the research group initiated coverage of in November with a

. In the new report, Muddy Waters questions Focus Media's "bizarre acquisition of a ginseng plantation at the Russian and North Korean border," saying that deal highlights the notion the company's acquisitions aren't "kosher." Muddy Waters notes that at least one of the selling investors in the plantation is a Focus Media employee. Focus Media frames itself as a digital media company, so what it wants with a ginseng plantation is anyone's guess. In fact, Muddy Waters has dubbed Focus Media the "Olympus of China," in reference to the controversial Japanese company that has recently been at the center of allegations of intentionally overpaying for acquisitions. Muddy Waters said that of $1.6 billion paid over its previous 21 deals, Focus Media has written down $1.1 billion of that sum, indicating the company knows it has been overpaying for acquisitions. In May 2008, Hunchun Shengtai Ginseng Plantation Co. was purchased by two individuals, one of whom was a Focus Media employee at the time, according to Muddy Waters. The pair then transferred ownership of Hunchun Shengtai Ginseng Plantation Co. to Focus Media in October 2008. "Along with many issues we identified in prior years financial statements, we encourage FMCN's auditor, Deloitte Touche Tohmatsu, to closely examine the Shengtai transactions for improprieties," Muddy Waters said in the report.