July 19, 2010 (FinancialWire) (Go to http://www.financialwire.net/?s=ftrdnwswnd for all of today’s featured news.) — Orient Paper, Inc. (AMEX: ONP), a Chinese manufacturer and distributor of paper products, said that its board has decided to retain law firm Loeb & Loeb LLP in an effort to fight charges of fraud made in a recent report by research firm Muddy Waters, LLC. Orient said that Loeb plans to work with the company's audit committee to retain a Big Four audit firm to conduct an independent investigation into the issues raised by the report.

Muddy Waters is a Nevada company that, on June 28, released a report claiming that ONP was a fraud, that it overstated 2008 revenue by 27X and misappropriated around $30 million since October 2009, and that the company overvalues its assets by at least 10X, among other charges.

Muddy Waters admits to having a short position Orient Paper’s stock.

Drew Bernstein, an independent director of Orient Paper and its audit committee chair, said that the firm’s audit committee, “firmly believes that the allegations made by Muddy Waters are categorically false and without merit." China-based Orient Paper, Inc., through its wholly owned subsidiaries, Shengde Holdings, Inc., controls and operates Baoding Shengde Paper Co., Ltd., and Hebei Baoding Orient Paper Milling Co., Ltd. The firm is engaged in the production and distribution of products such as corrugating medium paper, offset printing paper, writing paper, and other paper and packaging-related products in China.

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