2010年2月10日星期三

China Zhongwang Falls as It Resumes Hong Kong Trading

"China Zhongwang Falls as It Resumes Hong Kong Trading | AboutHK.Com - More Information About HK"

Bloomberg

China Zhongwang Holdings Ltd., a Liaoning-based aluminum producer, plunged in Hong Kong as it resumed trading after denying newspaper reports challenging the accuracy of its accounts.

The shares slumped 27 percent to HK$5.87 at the close of trade in Hong Kong, the most among stocks on the MSCI Asia Pacific Index. The stock was suspended on Jan. 7. The company released a statement late yesterday restating that a review of Zhongwang’s accounts by Ernst & Young LLP found “no deficiencies” with accounts included in its May 8 initial public offering prospectus.

China Zhongwang Falls as It Resumes Hong Kong Trading

Zhongwang said that while its audit committee had approved its accounts, Ernst & Young said it found some “external limitations in its verification procedures which require certain information of independent third parties.”

“Everyone’s dumping the stock,” said Castor Pang, an analyst at Cinda International Holdings Ltd. in Hong Kong. “Ernst & Young is saying that apart from sales and taxes there are parts of the internal information they can’t touch, limiting their investigation.”

The review was commissioned in November after the Economic Observer, a Chinese newspaper, alleged in a Sept. 14 article that Zhongwang had falsified customer information in its prospectus. The newspaper apologized for the report on Sept. 17, Zhongwang said in its statement.

Acquisition Speculation

Zhongwang said its audit committee had considered Ernst & Young’s views and “concluded that such limitations would not affect their conclusion in relation to the independent review” under Chinese laws.

Ernst & Young spokesman Christian May said the company approved Zhongwang’s statement to the exchange, and referred all further enquiries to the Chinese company. Calls to Zhongwang’s head office in China’s northeastern province of Liaoning weren’t answered.

Zhongwang said its audit committee concluded there were “sufficient documents and evidences which existed” to support the validity of the statements in the prospectus.

There was speculation before the suspension that Zhongwang would acquire Qinghai Guoxin Aluminum Industry Inc., William Ni, an analyst at Shenyin & Wanguo Securities Co., said from Shanghai. The company didn’t confirm the rumor on a conference call today, said Ni, who added Zhongwang was also catching up with the stock-market decline since Jan. 7.

The 15-member Hang Seng Materials Index, which includes Zhongwang, has dropped 21 percent since Jan. 7.

--Li Xiaowei. Editors: Richard Frost, Stan James

To contact the editor responsible for this story: Darren Boey at +852-2977-6646 or dboey@bloomberg.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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