Best World International's stock plunged to its lowest level in six months after activist short-seller Bonitas Research published a report questioning the health and wellness company's accounting and sales.
The Singapore-based firm overstated sales and profit in China, Mr Matthew Wiechert's Bonitas said in the report, which was based on on-the-ground research in China.
Bonitas believes Best World's "Chinese sales are a fraction of what was reported to shareholders", it said. Best World was not immediately available to comment.
The firm received a query on trading activity from the Singapore Exchange yesterday morning after shares fell as much as 11 per cent.
Trading was then halted after a request from the company, pending the release of an announcement.
The Singapore Exchange's regulatory unit SGX RegCo expects "the company to call for a full independent review of all matters raised in the report", it said in a statement after market hours.
"We expect to be consulted on the terms of reference of the review," said SGX RegCo.
Best World is the most-shorted stock in Singapore, with short interest standing at 13 per cent of the free float as of Monday, according to data from IHS Markit. Short interest as a percentage of the free float has almost doubled this month, the data show.
Best World said in February that it conducts "all areas of its business ethically and in compliance with applicable laws and accounting standards". This was in response to a report in The Business Times that said it was "challenging to figure" out where in China the company is selling its DR's Secret line of premium skincare products.
Best World also said it has appointed an independent auditor to review and address issues raised in the report.
Analysts have had concerns about the stock.
DBS Bank's Ms Carmen Tay suspended coverage in August, citing "limited visibility on underlying consumption trends under the new franchise model" in China.
CLSA's Horng Han Low maintained a "sell" rating in a report early this month, saying there is a "significant gap between consumer interest and revenue" in China.
Best World shares have tumbled 32 per cent this year through Tuesday's close after almost doubling last year.
Of the four analysts covering the stock, three recommend selling, while one has a "buy" rating, according to data compiled by Bloomberg.