A good one for the BRM Blog
Muddy Waters: Be wary of Hong Kong listed Chinese companies
By Hibah Yousuf @CNNMoneyMarkets April 3, 2012: 12:20 PM ET
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In the last month, Deloitte quit as the auditor of two Hong Kong listed Chinese companies, which could be signal more trouble ahead for Hong Kong listed firms.
In the last month, Deloitte quit as the auditor of two Hong Kong listed Chinese companies, which could be signal more trouble ahead for Hong Kong listed firms.
WASHINGTON (CNNMoney) -- For the past two years, Muddy Waters has been the ultimate whistle blower of questionable accounting practices by Chinese companies trading on U.S. and Canadian stock exchanges. Now, the research firm says investors need to beware of Chinese companies trading in Hong Kong.
"There was a propensity for fraudulent Chinese companies to list their shares in the West, but I think that trend has slowed down quite a bit ever since short sellers like Muddy Waters have come onto the scene," Muddy Waters founder Carson Block told CNNMoney during an interview at the Council of Institutional Investors spring conference in Washington, D.C.
"Now we're starting to hear rumblings out of Hong Kong," Block said. "Could Hong Kong be the next bastion of fraudulent revelations? It's difficult to say. But investors need to be wary."
He noted that in the last month, Deloitte -- one of the Big Four accounting firms -- quit as auditor of two Hong Kong-listed Chinese companies.
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