Are Hong Kong Sponsors Taking Their Due Diligence Seriously?

Global Risk and Investigations

November 13, 2014

Recent short seller attacks targeting Chinese companies listed in Hong Kong have not only resulted in huge financial losses, but also turned the spotlight on some of the market’s most established and well-known sponsors and auditors. In one of the most high-profile examples this year, shares of Chinese-based Tianhe Chemicals plummeted almost 50% in October after a report released by Anonymous Analytics alleged that the company had falsified documents to its auditor, Deloitte, prior to its listing on the Hong Kong Stock Exchange in June.

Despite rebuttals and repeated reassurances from Tianhe that the information in the report is inaccurate, we expect the due diligence work conducted prior to its listing (and for many other targeted Chinese companies) to be very closely scrutinised.

More Info

Share this page