Two more Chinese small-cap companies saw their shares halted the week of June 12 as the scandal surrounding stocks hailing from the People's Republic showed no signs of abating. First, it was China-Biotics ( CHBT) on Wednesday, June 15. Then, on Friday, Nasdaq suspended shares of Yuhe International ( YUII), a "leading supplier of day-old chickens raised for meat production." Fourteen Chinese stocks listed on major U.S. exchanges are now halted. Some of the suspensions have lasted nearly three months as exchange officials sort through allegations of accounting chicanery, mostly lodged by audit firms that abruptly resign. The odds of maintaining a listing in the wake of a halt appear increasingly poor. Of the halts since the beginning of the year, exchanges have booted nine companies' equities to the over-the-counter markets, where values are typically and predictably decimated. The Yuhe suspension came after the company held what one analyst called an "astonishing conference call" on June 17 to address allegations made by a short- seller group a day earlier. The group, called Geoinvesting, said it had unearthed evidence that Yuhe had misled investors about an acquisition of 13 chicken farms said to have occurred in 2009. On the conference call, company executives denied that accusation, but admitted that they had failed to disclose that the acquisition hadn't gone through. As part of the purchase agreement, Yuhe has said that it made a down payment of 80% of the purchase price, or $12 million. But when the seller decided to spike the deal, Yuhe's chairman and CEO, Zhentao Gao, decided to put the $12 million into a private bank account, the company's CFO and COO said during the conference call Friday. The executives also said that, in place of this failed deal, Yuhe had gone ahead and purchased 11 different farms from a separate seller, using that $12 million sum. "During this entire time, Yuhe continued to claim that business was usual and that the acquisition from Dajiang did go forward," said Rodman & Renshaw ( RODM) analyst Lewis Fan in a note on June 17. Fan wrote that Yuhe's failure to disclose this information was "perhaps a face-saving measure." "We are dumbfounded by the events that have taken place," Fan continued in the note. "If true, what the company, and more specifically, the company CEO, has done, could be serious violations of securities regulations." Rodman, which also suspended its coverage of Yuhe, is normally a China stock bull by dint of its role as underwriter of scores of Chinese securities, including a $25 million follow-on offering of Yuhe shares in October 2010. The halt in Yuhe shares comes two days after China-Biotics, long a target of short-sellers, failed to file its 10-K annual report with the Securities and Exchange Commission after its auditor refused to sign off on the numbers. Nasdaq halted trading in the stock on June 15 after the close. The reasons for the auditor's refusal were vague but nonetheless of a piece with an unfolding pattern. China-Biotics' audit firm, BDO Limited of Hong Kong, told the company in a June 10 letter that it had "identified certain serious issues as part of its ongoing audit work," according to China-Biotics in its June 15 disclosure filing. Other Chinese companies facing trading halts this year have seen their auditors allege that executives colluded with their banks to forge bank documents in a bid to fool auditors about the size and health of those businesses. Those types of allegations, which would seem to support the suspicions of short-sellers who say they've been unearthing fraud at U.S.-listed Chinese companies for more than a year, have erased investor confidence in the sector. Unlike many other cases this year of a Chinese company failing to file its annual report, BDO hasn't resigned. China-Biotics, which has denied charges of wrongdoing made both by short-sellers as well as reports in the Chinese business media, said its audit committee is "investigating the issues" raised by BDO this time around and is "working to take all of the actions and to provide the requested information to BDO as promptly as reasonably practicable."