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Short-Seller Cuts Through China Red Tape

And Peter Humphrey, a forensic accountant and corporate due diligence investigator in China, puts it bluntly: "The apologists for the fraudsters in the U.S. like to downplay the importance of SAIC filings because doing so serves their purposes."

Bird's own review found many cases where SAIC filings do match SEC records, in particular for Chinese companies that went public in Hong Kong or in the U.S. through direct IPOs, as well as those that trade in the United States through issuance of American depositary receipts. As an example, he mentions Solarfun Power (SOLFI), a manufacturer of solar panels that went public in the U.S. in 2006. Bird says Solarfun's filings with the SEC matched filings with the SAIC down to the last digit.

Bird says he concluded that the RTO companies were special, in a bad way. While more than a few prominent shorts are quick to suggest that they are on the side of the angels in their campaigns against RTOs, Bird is down to earth about his own motivations.

"I'm not a do-gooder at heart," he says. "Sure it's nice to have that as a mantle to carry around with you. But if you get paid for it on top of that -- and get paid extraordinarily well -- well, then it takes on a great deal of fun."

-- Reported by Scott Eden in New York

>To contact the writer of this article, click here: Scott Eden.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
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