Friday March 23, 2012

Dairy firm auditors quit, trade halted

HONG KONG: Trading in Chinese milk formula products producer Daqing Dairy Holdings Ltd was suspended after the company's auditors quit, the second auditor resignation from a Hong Kong-listed Chinese company in recent days.

China-based Daqing Dairy, with a market value of about HK$1.7bil (US$218.95mil), did not identify the auditors and gave no details about the resignation. Company officials were not immediately available for comment.

Deloitte Touche Tohmatsu was named as an auditor in Daqing's latest interim report. Deloitte officials did not immediately respond to telephone calls for comment.

A run of accounting scandals at US-listed Chinese companies last year has highlighted the risk of financial irregularities, and led to some auditors facing class-action lawsuits from angry investors.

The Daqing resignation came a week after Deloitte resigned as auditor of Boshiwa International Holdings, which holds the licence to make Harry Potter and Bob the Builder-branded clothes.

Deloitte said it was not satisfied with the company's response to questions about some of its transactions, knocking the company's share price down as much as 42% before trading was suspended.

Deloitte's move was seen as the first in a run of likely accountant departures from Chinese companies in coming weeks as the audit season draws to an end. - Reuters

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