Shares of Golden Heaven Group (NASDAQ:GDHG) stock are in focus following a new short call from Hindenburg Research posted on X, the platform formerly known as Twitter. The company operates as a provider of six entertainment locations in China, including amusement and water parks.

GDHG became publicly traded in April and has since taken off, which Hindenburg believes is unjustified. The short seller also alleges that several of the firms who helped take the company public have experienced FINRA infractions, while Golden Heaven’s CEO has received fraud allegations in the past.

Back in 2019, Chairwoman & CEO Jin Qiong and her spouse were involved in fraud allegations concerning a pharmaceutical company that they held control over. The allegations resulted in a judgement, which was left unpaid. This resulted in the headquarters of the company being shut down, which carries the same address as the principal executive office of Golden Heaven.

GDHG Stock: Hindenburg Issues Short Call

“Golden Heaven’s Chairwoman & CEO is currently subject to limits on high consumption, and equity freezes, according to QCC,” said Hindenburg. However, none of this information was released to U.S. investors. After the consumption restriction, Qiong transferred six amusement parks to Golden Heaven for $7.4 million through an entity controlled by her. In 2022, Golden Heaven filed for an initial public offering (IPO) at a valuation of over $200 million.

Hindenburg’s investigators visited all six parks to gauge visitor activity. The company’s largest park, Yueyang, was responsible for 36% of all guests in 2022 with an average of 2,400 guests per day. However, company filings noted that the park had a capacity of 1,100 guests per day. During the visit, the investigator saw only 10 cars in the parking lot during noon on a Saturday.

An investigation into Golden Heaven’s second largest park, Changde Jinsheng, yielded similar results. The park accounted for 21% of the company’s guests, yet the investigator only counted 20 cars in the parking lot at 10 a.m. on a Saturday.

The rest of the four park visits also yielded similar results, with very few visitors at peak hours. As a result, Hindenburg has “major doubts” concerning the validity of Golden Heaven’s financial results.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.