The following commentary comes from an independent investor as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- Some say State Administration for Industry and Commerce (SAIC) filings for Chinese reverse takeovers (RTOs) don't matter. And neither do State Administration of Taxation (SAT) documents that are inaccessible to independent third parties such as auditors. Think again.
SAIC and SAT filings do matter. Deloitte Touche Tohmatsu (DTT) finally chose to reference SAIC and SAT documents in its probe into China MediaExpress Holdings (CCME) operations:
Issue raised: Information on file with the State Administration of Industry and Commerce as to certain subsidiaries appearing to be inconsistent with comparable financial information provided to DTT.Issue raised: The verification of certain subsidiary tax payments with the local office of the State Administration of Taxation. If auditors are referencing SAIC filings in audits, shouldn't they be important to investors? Investors who ignore them may find that their portfolios of diamonds in the rough with glorious price-to-earnings ratios of 5 or less are piles of worthless paper. (Investors also need to be aware that companies that amend past filings likely aren't alerting SAT agencies of changes.)
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