Shares of Chinese companies listed in New York fell on
Wednesday after American regulatory authorities alleged that the big four
auditors had refused to co-operate in probing fraud by Chinese firms.
Most of the losers were Internet stocks.
New Oriental Education & Technology Group Inc.
tumbled the most since July as Wells Fargo & Co. said the education
services provider is at risk of being delisted after the Securities &
Exchange Commission accused the auditors of refusing to cooperate in a fraud
probe of companies based in China, a report by Bloomberg said.
Chinese search engine Baidu and Sina Corp also fell to
two-year lows while Youku Tudou fell the most since September.
The U.S. Securities and Exchange Commission said on
December 3, that Deloitte Touche Tohmatsu CPA, Ernst & Young Hua Ming LLP,
KPMG Huazhen and PricewaterhouseCoopers Zhong Tian CPAs refused to cooperate
with accounting investigations into nine companies traded in the U.S.
Incidentally the regulator has not named the stocks on
which the probe is centred.
Analyst Trace Jordan mentioned in a report that Well
Fargo had said that the probe would place New Oriental and Ambow Education
Holding at a risk of being delisted from the American exchanges.
The auditors themselves have said in their defence
that Chinese laws prevent them from complying with demand made by the SEC.
Chinese law bans the removal offshore of audit papers, while foreign regulators
aren’t allowed to work inside the nation’s borders.
This has created a situation where investors do not
have much faith in the stocks of Chinese firms, which traded in the U.S.
Shares of Chinese companies were under
heavy selling pressure including Baidu.com, Inc. (ADR)(NASDAQ:BIDU) slumped 8%,
SINA Corp(NASDAQ:SINA) slumped 7.50%, Suntech Power Holdings Co., Ltd.
(ADR)(NYSE:STP) fell 3.50%, Ctrip.com International, Ltd. (ADR)(NASDAQ:CTRP)
lost 8.50% and SouFun Holdings Limited (ADR)(NYSE:SFUN) slid 5%.
No comments:
Post a Comment