See PEZ, the moment the bondholders wanted a small payment (around 10% of reported 'cash').... well... according to the liquidator the assets were promptly transferred out of the company leaving only the debt and share certificates in that debt. Obviously this is a different company, but given how many times it has happened around the world with the complicity of the Chinese authorities... that alone is enough to make Chinese run companies trade at a discount. But this risk is any T/O might work and you might only end up with a no-asset-shell?
I guess there may be Chinese run companies that state accurate accounts and really want to build a business with foreign capital, but they are truly hobbled by this scandal. Until they pester their authorities to make thousands of arrests and repatriate funds stolen in these scams nobody will ever have confidence in chinese run companies ever again. And lets face it... they will not do what is required as the whole economy is a sham.
