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  "documentTitle": "RINO International Corp. (RINO)",
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  "authorName": "Carson C. Block",
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  "presentationDate": "2010-11-10 00:00:00",
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  "notes": "This is a research note from Muddy Waters Research detailing a short thesis.",
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      "text": "RINO has Fabricated FGD Customer Relationships and Significantly Overstated Revenue.",
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      "text": "RINO has fabricated FGD customer relationships, and therefore significantly overstated revenue. We spoke with knowledgeable people at nine of RINO's purported customers.",
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      "text": "RINO is not the industry leader it claims to be in the steel sinter FGD system industry. It claims gross margins of 35% to 40% on FGD projects, which are far in excess of those of the leading companies (generally less than 20%).",
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      "text": "While immaterial compared to their other sins, RINO management's \"borrowing\" $3.5 million to purchase a luxury home in Orange County gives insight to their character.",
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      "text": "RINO's value added tax (\"VAT\") payment disclosures in its SEC filings greatly contradict its reported revenues, and are a clear sign of cooked books. The discrepancies also suggest money leakage from the Company.",
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      "text": "RINO's balance sheet has an astonishingly small amount of tangible assets for a manufacturer. Rather, it is filled with low quality \"paper\" assets that we doubt exist.",
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      "text": "RINO's claim that it had no PRC income tax expense in 2008 and 2009 cannot be true, which also shows significant misstatements in its financials and lack of diligence by its auditor.",
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      "text": "Because management is abusing the VIE structure. We believe that RINO's shareholders own only a shell company that still has some of the cash they contributed. Instead, they have pulled out at least $35 million from the Company.",
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      "text": "RINO designs, sells, manufactures, installs, and services environmental protection equipment for China's iron and steel producers. Because FGD systems historically have accounted for 60% to 75% of RINO's revenue, we focus specifically on this line of business.",
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