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Chinese Companies to US Markets in Reverse Takeovers: Ripe With Fraud


Guest ValueCarl
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Guest ValueCarl

SEC has also started focusing on individual Chinese companies for accounting violations and lax auditing practices.

 

"...The House financial-services committee is also revving into gear and may hold hearings on Chinese-company accounting in 2011... The committee's fear is that some companies are rife with self-dealing and potential fraud and weak international standards have let it go largely undetected," the report noted.

 

http://www.business-standard.com/india/news/sec-probes-many-chinese-cos-listedus-bourses/119843/on

 

The report cites investment bank Roth Capital Partners in measuring the reverse merger market size: 94 companies trading an average of 50,000 shares per day with a total market value of $20 billion.

These companies trade on U.S. stock exchanges, but because their principle assets remain in China they are regulated by Chinese laws outside the domain of the SEC.

 

Read more: http://www.benzinga.com/news/11/01/778739/bloomberg-businessweek-calls-attention-to-chinese-reverse-merger-frauds#ixzz1BosMY931

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