This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
Longtop Financial(LFT) came public in the U.S. through the front door, using an IPO as opposed to a murky backdoor reverse merger, in which a private entity is folded into a shell company that already has a stock registration. As such, Longtop ought to have undergone a more rigorous screening process -- by regulators as well as investors.
None of this was able to prevent the eruption of yet another accounting scandal four years after the IPO, underwritten by Goldman Sachs (see below) and
Deutsche Bank(DB - Get Report) raised about $180 million for Longtop. In an astonishing series of disclosures in May, Longtop was forced to reveal that its auditor -- once again, the Chinese affiliate of Deloitte -- claimed to have found evidence of bank-document forgery and other falsified financial data. The stock was halted on May 17 and remains so. Longtop said its cooperating with an SEC probe.
Longtop's bulge-bracket backing drew in a group of brand-name investors and mammoth investment funds as institutional holders, including
Fidelity and several so-called "Tiger Cubs," former apprentices of the hedge-fund legend Julian Robertson: Lee Ainsle's
Maverick Capital and Charles "Chase" Coleman's
Tiger Global Management. As of March 31, the two funds held 10% and 4.6% of Longtop, respectively.
It's Tiger Global, however, that has the honor of owning large blocks of two halted Chinese stocks at the moment: Longtop and
Duoyuan Global(DGW), the sister company of
Duoyuan Printing(DYNP), which was summarily delisted by the
New York Stock Exchange earlier this year after an auditor resigned and the SEC began investing potential illicit activity.
A spokeswoman at Tiger Global declined to comment.