KPMG auditors chowing down with Hontex

scmp:

"Money Chow told the court that Sister Chan had given her an envelope with a box inside during a lunch in January last year.

"I refused to accept it as the company does not allow us to take gifts of more than HK$500," she told the court. "I considered the items inside the envelope could be valuable as Sister Chan tried to hide the envelope from the others"

Rats jump ship

The entire staff of Grant Thornton in HK jumps over to BDO to avoid the numerous court cases filed against them after one of their former partners Ricardo Dias-Azedo stole clients', friends' and even his relatives' funds. Old Ricardo followed up the act by disappearing.

China Green 904.HK releases

Going somewhat to reassure investors China Green releases their annual results this morning. Net profit compared to last year rose 25%. The stock jumps 25% as well.

Interesting tidbit about the auditors:

"CCIF CPA Limited (“CCIF”) has merged their business with PCP CPA Limited resulting
in Crowe Horwath (HK) CPA Limited (“Crowe Horwath”) operating as the merged firm
from 13 October 2009. "

Another frauditor

To add to the redflag list:

"Four of the firms in this article share the same auditor, Hopkins. Our database shows that it currently has only 6 listed audit clients, including GEG, GGT, MFG and UBS. The other two are Neo Telemedia Ltd (Neo Telemedia, 8167) and Tack Fat Group International Ltd (Tack Fat, 0928), a company we warned the market about twice (in 2005 and 2007) before it collapsed in 2008. It appointed Hopkins on 6-Oct-2009.

Mei Ah Entertainment Group Ltd (MAEG, 0391) owned 3.9% of UBS when it was listed in 2001. In 2007, MAEG was one of three subscribers in a takeover of Neo Telemedia, along with Hanny Holdings Ltd and Hoffman Ma Ho Man, the Deputy Chairman of Success Universe Group Ltd (0487). Hopkins has been auditor of Neo Telemedia since 20-Sep-2005.

Hopkins was also the auditor of Code Agriculture Holdings Ltd (Code Agriculture, 8153) from 15-Jun-2006 to 1-Apr-2009. Code Agriculture was listed as "M21 Technology Limited" on 30-Mar-2001, when it was 29.25% owned by MAEG.

The MD of MAEG, Mr Tong Hing Chi, was an NED of UBS from its IPO until 30-Aug-2005. He was MD of Code Agriculture from its IPO until 31-Oct-2008. He has been Vice Chairman of Neo Telemedia since 1-Mar-2007.

In the past, Hopkins has been auditor of several companies we have written about, including Skyfame Realty (Holdings) Ltd (from 2002 to 28-Sep-2005) and Riverhill Holdings Ltd (from 22-Aug-2003 to 29-Nov-2004). Both companies featured in our "Styland Network" stories of 2002. This was eventually followed by a series of regulatory investigations and actions."

China/HK Fraudsters

CCIF auditors makes another ignominious appearance:

"It also changed its auditors from Hopkins CPA Ltd (Hopkins, formerly Albert Lam & Co) to CCIF CPA Ltd (CCIF), ostensibly because Hopkins was going to carry out an internal control review, although we cannot find any subsequent mention of this review.

The managing director of CCIF is Charles Chan Wai Dune. He and CCIF were recently fined and reprimanded by the HKICPA for a defective audit of UDL Holdings Ltd (the company was not named but we figured it out). CCIF was replaced again as auditor of UBS by Hopkins on 26-Aug-2008. All of the audit reports on UBS since its IPO have been clean."

HK to allow Chinese auditors

Another blow to investors in HK. The HKex/SFC (who knows why they require two different regulators and where the demarcation is) cannot pursue Chinese companies listed in HK already - check out the list of 'liquidations' that have assets mysteriously disappear (First Natural Holdings).
"A proposal to allow mainland companies listed in Hong Kong to be audited by mainland accountants came under fire from legislators yesterday.

Paul Chan Mo-po, who represents the accountancy sector, said the move could hurt local investors' interests. "This could create a problem, if non-Hong Kong auditors fail in their duty and the local regulator could not directly investigate or punish them," he said.

The proposal, expected to be introduced this year, is an extension of a stock-market rule that allows some Hong Kong-listed firms to be audited by overseas accountants."

What are the chances of the HKex/SFC pursuing an incompetent/corrupt auditor in China?..... ZERO. Secretary for Financial Services and the Treasury Chan Ka-keung is either being disingenuous or just plain ignorant to come up with this gem.

"Chan Ka-keung said that the rules were in line with international practices, and that local regulators could work with their counterparts overseas and on the mainland to solve any problems that arose."

Ernst & Young settles in Moulin case

Moulin, which once claimed to be Asia's biggest manufacturer of eyewear, was wound up by the High Court in 2006 amid fraud allegations, owing lenders HK$2.7 billion. Ernst & Young was Moulin's auditor between 2002 and 2004.

The liquidator told creditors in private that one of Moulin's four biggest customers was really a Chinese restaurant in McCook, a town of 8,000 in Nebraska in the United States, people who attended the meetings said.