(CapitalWatch, July 28, New York) The retailer of cute home paraphernalia, Miniso Group Holding Ltd. (NYSE: MNSO; HKEX: 9896), became the latest U.S.-China stock to get hit by short-seller claims – and the company has tumbled significantly since despite issuing a rebuttal.

Earlier this week, Blue Orca Capital published a report alleging Miniso misstated its franchise numbers, siphoned IPO proceeds to the chairman, and pulled out funds via off-balance-sheet transactions. Further, the short seller claimed it gathered independent evidence that Miniso's business has been flagging – specifically, revenues that declined for years, hidden costs, store closures, and lowered franchise fees.

"Not only does this undermine the authenticity of MINISO's reported financials, but also suggests that MINISO should trade at a fraction of its current share price," Blue Orca Capital wrote.

In a Wednesday filing, Miniso responded to the allegations, calling Blue Orca's report "without merit" and containing "misleading conclusions and interpretations."

Miniso also said it was reviewing the claims and considering its further action "to protect the interests of all shareholders." Further, the company's three independent directors are to oversee an independent investigation into the matter, according to the filing.

The damage had already been done, however. Despite the rebuttal, shares in Miniso plunged about 24% from Monday's close to $5.62 per share as of early trading Thursday.

Miniso, the MUJI-wannabe in China, lifted off in a $608million public offering on Wall Street in October 2020. By today's standards, seeing the vast majority of U.S.-China stocks listed in 2020-2021 averaging negative returns and just a handful of Chinese firms making it to a New York listing this year, Miniso was very lucky to hit that big of a target.

Earlier this month, Miniso became dually listed as its shares also floated on the Stock Exchange of Hong Kong in a HK$476 million ($72 million) fundraising. That, according to Blue Orca, was another sign that Miniso's business is lagging – considering the "supposedly generates healthy cash flows from operations," as the firm wrote.