* Says allegations in Muddy Waters report are false
* Threatens legal action
* Shares halted after losing half their value Thursday
BEIJING, Oct 25 (Reuters) - NQ Mobile Inc, the Chinese mobile security software company labelled a "massive fraud" by Muddy Waters Research Group, hit back on Friday by releasing details of its bank accounts and threatening legal action.
NQ Mobile described as "false and inaccurate" the allegations by Muddy Waters, which is owned by short-seller Carson Block.
"We know no better method than to just completely open up the kimono and say, 'Here's our cash balances by account,"' Omar Khan, NQ Mobile's co-chief executive, said in an interview with Reuters in Beijing.
Trading in NQ shares was halted on the New York Stock Exchange.
Muddy Waters' report on Thursday wiped more than $500 million off NQ's market value, nearly half of its capitalization.
Muddy Waters said that at least 72 percent of NQ's purported 2012 China revenue from its security products was fictitious, coming from a shell company that Muddy Waters alleged NQ controls.
Muddy Waters' report said NQ's cash balances were "highly likely to not exist." ()
NQ responded by publishing a list of 14 bank accounts in mainland China and Hong Kong holding the equivalent of about $295 million.
"(NQ) believes that the allegations and accusations set forth in the Muddy Waters report are false and inaccurate and contain numerous errors of facts, misleading speculations and malicious interpretations of events," NQ said in a statement.
Muddy Waters was not immediately available for comment on Friday.
Its reports have previously unleashed scandals involving other Chinese U.S.-listed companies, including Sino-Forest Corp, Longtop Financial Technologies Ltd and China MediaExpress Holdings Inc.
Khan said in the interview that NQ's management was dealing with the report as a matter of urgency. "We will use all means necessary and reasonable to protect our shareholders, our employees, our company, and our investors."
NQ has raised $330.6 million from stock and bond sales over the past three years.
The company completed the sale of $172.5 million in convertible bonds this month. Morgan Stanley and Deutsche Bank unit Deutsche Bank Securities Inc bought $22.5 million of that offer.
NQ was founded in 2005 and listed on the New York Stock Exchange in 2011 in a $89 million fundraising that was underwritten by Piper Jaffray Companies. It raised an additional $69 million in a secondary offering last year.
Morgan Stanley and Deutsche Bank declined to comment. Piper Jaffray did not respond to an email request for comment.
NQ's stock last traded at $12.04 on Thursday.