(Chinese stock, accounting blow-up story updated for latest rallying Chinese stocks)
NEW YORK (TheStreet) -- Are accounting blow-ups a fundamental risk of investing in Chinese stocks, or just another unfair reputational knock against the emerging world giant's economic juggernaut?
Duoyuan Printing announced a number of changes on Monday that led to the selloff. The chairman announced that the CEO and CFO of the company were being replaced, and the Deloitte Touche Tohmatsu had been fired as auditor after bringing issues to the attention of Duoyuan management which remain unresolved.Duoyuan Printing was down 54% on Monday, while Duoyuan Global declined by 41%. While Duoyuan Global Water's share bleeding had stopped by Wednesday morning, selling of Duoyuan Printing shares didn't cease until Thursday's action.
(YUII) took a market beating after its auditor, Grant Thornton, resigned. Yuhe says it was misunderstanding between the Chinese company and the auditors over provisions of Sarbanes-Oxley that the Chinese management did not understand. It was guilt by association in the case of Duoyuan Global Water, which shares the same chairman as the printing company.
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