Understanding China, One Blog at a Time

An American in China

More Chinese Stock Fraud in the US…

Posted by w_thames_the_d on February 16, 2011

While I love the food here and they treat foreigners very well, I think Chinese accounting and financial methods are as transparent as Beijing air. And while I realize that we as Americans are unable to put off gratification and truly analyze many things and if a Chinese stock is hot then we need to jump on the band wagon and get a few shares as well. Twenty percent of all Chinese stocks listed in the US are being investigated for fraud, and by this point if you get caught holding these stocks then shame on you for being dumb…- really. Anyway, here is another incidence of a Chinese company listing its stock in the US market, only to have allegedly lied about everything from sales to contracts.

excerpt from here:
“By now anyone who invests in China stocks is familiar with the carnage going on with the stock of Rino International(RINO_). On Nov.10, the Hong Kong based research duo (and dedicated short seller) known as Muddy Waters produced a 30-page report on Rino declaring it to be an abject fraud and with a target price of $2.45 vs. its then price of around $15.00.
he stock has now been halted and the share price stands at $6.07, a decline of 60% in seven days. Their auditor, Frazer Frost, came out on Friday and confirmed that there were in fact phony contracts with revenues that didn’t exist and other irregularities.”

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