China’s Regulator Looking into Accounting Issues

Friday, July 15, 2011 Print Email

China is looking into accounting issues involving Chinese companies listed in North America, an official at the country's securities regulator said in the watchdog's first public remarks since a series of accounting scandals.

Corporate misbehavior, unfamiliarity with the U.S. market and some practices involved in overseas listings had all contributed to recent investor distrust of Chinese companies, said Wang Ou, vice head of research at the China Securities Regulatory Commission (CSRC).

"First, we have to admit that some of our companies may have flaws. Second, our (companies') understanding of the U.S. market and the measures to tackle risk there may be inadequate," Wang said at a conference in Beijing this weekend.

"We have contacts with the U.S. and its relevant regulatory bodies and we're studying the issue together."

Reuters saw the footage of his comments in a video posted on the China Business News website.

Investors have sold off foreign-listed Chinese companies in recent weeks following a flurry of accounting scandals and fraud allegations.

On Monday, shares in meat processor China Yurun Food dived 20 percent on market speculation that short-seller Muddy Waters was about to issue a negative report on the company.

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