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On Tuesday 11 October 2011, 14:20 SGT
* Latest auditor resignation to hit a Chinese company
* Sky China CFO in China to verify company bank balances
* Audit committee says CEO has no access to funds (Adds comment from company, background on S-chip scandals)
By Charmian Kok and Rachel Armstrong
SINGAPORE, Oct 11 (Reuters) - Shares of Singapore-listed Sky China Petroleum Services Ltd slumped as much as 32 percent to a record low on Tuesday after the company said its auditors, Ernst & Young LLP, had resigned.
This is the latest in a string of auditor resignations that have hit Chinese stocks listed in Singapore and the United States, sending investors running.
By 0555 GMT, shares of Sky China were down 21.8 percent at S$0.059, with 22.8 million shares changing hands. This was three times its average daily volume over the last five sessions. Sky China shares fell 23 percent on Monday.
In a statement on Monday, Sky China said E& Y confirmed to its audit committee that the resignation was triggered after the resignation of E& Y's China arm as auditors of Nasdaq-listed SinoTech Energy .
Sky China's chief executive, Liu Qingzeng, is also the chairman of the board of SinoTech.
The resignation of SinoTech's CFO and E& Y's China arm came after a shortseller of SinoTech's stock, alfredlittle.com, made allegations about the company's business and the accuracy of its financial statements.
CHECKING BANK BALANCES
Sky China said its audit committee was unaware of any further reason for the resignation.
" As far as the AC (audit committee) is aware, there are no accounting treatment disagreements with E& Y and E& Y has not informed the AC if it is aware of any circumstances connecting with the resignation that should be brought to the attention of the company's shareholders," it said in a statement to the Singapore Exchange .
Ivy Ma, the company's board assistant, told Reuters by telephone that Sky China's chief financial officer, Li Chak Fu, is now in China where he is going to verify the company's cash balances in its bank accounts.
" Our company is definitely ok," she said when asked about the plunge in its share price. She said the company would provide more information once Li returns from China next week.
The company's audit committee also said in its Monday statement that they have agreed with the chief executive that he will not have any access to the company's bank accounts and funds, nor will he have any influence over its accounting functions.
STRING OF SCANDALS
A string of scandals at so-called S-chip stocks of Chinese companies listed in Singapore, is reminiscent of an earlier wave in 2008 and has dampened investor interest in the sector. The FTSE Straits Times China Index, which tracks Singapore-listed Chinese stocks, has fallen 32 percent this year.
In June the SGX reprimanded multimedia firm KXD Digital and its former chairman and CEO, Liu Fusheng, for breaching a host of rules, including failing to disclose that it had ceased all business operations. Its shares have been suspended since April and it is now under the control of managers from its auditors.
On the same day in June China Gaoxian said its special auditor had obtained evidence showing its cash and bank balance at the end of last year was around 93 million yuan ($14 million), not 1.1 billion yuan which the fabric maker had originally claimed. Its shares have been suspended since March.
" The resignation of the auditors doesn't bode well" for Sky China, said Roger Tan, head of research at SIAS Research. " They will have a lot of explaining to do and the market is taking a cautious stance in the meantime. It's up to the company to prove their innocence."
" We've already seen a lot of S-chip scandals and this is giving investors more bullets to avoid them. It really puts on a lot of pressure on other S-chips to prove their innocence."
Singapore Exchange (SGX) has been on a long-running charm offensive to tap into the lucrative Chinese market and attract more issues from the mainland. It now has around 150 China-companies listed on its exchange, around 20 percent of the total.
In response to the recent scandals, SGX has been trying to push through a series of new corporate governance requirements to try to raise the standards of its issuers.
Last month it brought in new rules requiring companies to disclose more information about their internal controls and compliance procedures.
It is also considering forcing all companies with a primary listing in Singapore to hold their annual general meeting in the city-state to allow investors to grill company management. (Editing by Matt Driskill and Anshuman Daga)
Share px. plunge after auditors E & Y resignation.
Ceveat emptor.
Can recommend buy which one better?
And whats your holding now?
Thanks :)
Keep buying, while the price is low!
Richman ( Date: 16-Sep-2011 23:22) Posted:
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Buy, Buy, Buy!
warrenbegger ( Date: 18-Sep-2011 20:27) Posted:
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Own Kisses Pay Kisses...
$$$ #$%#
Where my kisses???
Hello!
U there???
Can give me kisses?
Hulumas ( Date: 17-Sep-2011 23:10) Posted:
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?
warrenbegger ( Date: 17-Sep-2011 17:22) Posted:
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Love is blind...
Mind Your laguage please!
warrenbegger ( Date: 16-Sep-2011 23:30) Posted:
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That prove she/he/shehim/X?? is still alive and got one last breath.
Eat sai fish coming...
MasterNg9999 ( Date: 16-Sep-2011 23:19) Posted:
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Good Job!
Hulumas ( Date: 16-Sep-2011 22:49) Posted:
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HAHAHA HULUMAS
YOU ARE BACK!!!!!!!!!!
where have you been??? miss your BUY BUY BUY S-CHIPS call.....
need you make this siao market even more siao....
Cheer
Faint ZZZzzzzz
Hulumas ( Date: 16-Sep-2011 22:49) Posted:
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Now, with the price level < Sgd. 0.1 I shall fight again the BB, and using keep buying strategy!
bryancbq ( Date: 20-Jun-2011 21:03) Posted:
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Since I feel Mr. Market against me, I want peace, I do not want to fight, that is why I follow the crowded forumers here recommendations! " BOoo BIaan"
bryancbq ( Date: 20-Jun-2011 21:03) Posted:
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u cut all le ah? hmmm.
Today, I have cut all out my holding in this counter! Since, market do not like me to buy accumulation, then I should render myself to sell my beloved holding to the market, and let them happy, as such I won't fight with the BB!
Hulumas ( Date: 20-Jun-2011 13:03) Posted:
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