TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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04 June 2011
The United States Securities and Exchange Commission (SEC) is investigating some accounting firms over their audits of Chinese companies whose shares trade in the US, and the inquiry is expected to lead to enforcement cases, The Wall Street Journal reported yesterday.
The Public Company Accounting Oversight Board (PCAOB), the government’s accounting regulator, said it is investigating whether the audits are stringent enough, said the newspaper on its website.
The probe involves both large and small accounting firms, but it is not known which ones are involved, the paper said.
The SEC had already said it was examining accounting and disclosure issues regarding Chinese companies that engaged in ‘reverse mergers’, which allow companies to list on US exchanges without as much regulatory scrutiny as an initial public offering (IPO). Now, sources have told the Journal that the investigation also includes auditors.
As part of its inquiry, the SEC has suspended trading on some Chinese companies, questioning their truthfulness about their finances and operations, said the paper.
If regulators find violations, they could file administrative proceedings against audit firms over allegations such as improper professional conduct, and the SEC could file civil lawsuits as well, it added.
The PCAOB says the audits are sometimes weak, in part because of obstacles that make it hard to sniff out problems, said the Journal. Some US auditing firms, it added, outsource accounting work to inadequately trained Chinese accounting firms, and China has blocked the board from inspecting audits on-site.
In reverse mergers, a foreign firm is ‘bought’ by a publicly traded US shell company. But the foreign company assumes control and gets the shell’s US listing without the level of scrutiny that an IPO entails, said the Journal.
Nearly three-quarters of the 215 Chinese companies listing in the US from 2007 to early last year did so via reverse merger, according to the PCAOB. Since February, about 40 Chinese companies have either acknowledged accounting problems, or seen the SEC or US exchanges halt trading in their stocks because of accounting questions, said the Journal.
The US firms that audit Chinese companies are mostly small shops, the paper said.