Wall Street Clean-Up Underway Amid Accounting Crisis 会计危机中华尔街展开清理行动

By newsdoug on July 25, 2011

The first signs of a clean-up of some of the smaller US-listed Chinese firms is underway, with two announcing in the last week that they have fallen out of compliance with Nasdaq listing rules due to late filing of annual reports. The pair, AutoChina International (Nasdaq: AUTC) and CDC Software (Nasdaq: CDCS), both issued the same generic statements, each saying it was notified of being out of compliance with Nasdaq rules for failing to file its annual report by the required deadline. (AutoChina announcement; CDC Software announcement) These are two of the bigger US-listed China companies, which is why they’ve made these public announcements, but I’m certain that many smaller companies with market value of less than $1 million have also probably fallen out of compliance for the same reason, namely that no accountant wants to certify their results for fear they contain inaccurate and misleading information. I wouldn’t be surprised if either AutoChina or CDC is ultimately de-listed, and would expect many of the smaller companies to be de-listed as well by this time next year. Meantime, the confidence crisis has claimed yet another victim, this time Shanda’s (Nasdaq: SNDA) already dubious IPO for its Cloudary literature unit, according to Chinese media reports. (Chinese article) Suspension of the Cloudary plan follows the similar pulling of an IPO by video and audio sharing site Xunlei last week, after demand evaporated for the offering. (previous post) Xunlei may come back to market in the next 2-3 months, but don’t expect to see Cloudary, a much less interesting offering, coming back for a listing until next year at earliest.

Bottom line: A clean-up of smaller New York-listed Chinese firms has begun, with many likely to de-list by this time next year due to accounting issues.

华尔街清理一些较小型在美上市中资企业的信号开始浮现。上周两家企业宣布，因未能按时提交年度报告，被警告违反了纳斯达克上市规则。开元汽车(AUTC.O)与中华网软件(CDCS.O)双双发布声明称，因没有在截止日期前按时提交年度报告，被通知违反了纳斯达克规定。他们是在美上市的两家较大中资企业，这也是其发布公开声明的原因。但我肯定还有很多市值不到100万美元的小企业可能也因同样的原因违反规定，也就是说，因害怕报告中含有不准确、误导性信息，没有会计人员愿意为其审计报告结果。如果两家企业最後被摘牌，我也不会感到意外，而且我预计到明年这个时间很多小一些的企业将会被摘牌。同时，又有新企业因信任危机倒霉了。这次是盛大网络(SNDA.O)旗下子公司盛大文学海外，其纽交所IPO进程宣布暂停，而上周迅雷也决定推迟赴美IPO，因认购不足。迅雷未来两三个月内或许会重启IPO进程，但是盛大文学就未必了，最早可能也要等到明年了。

一句话：华尔街对较小中资企业的清理行动已经启动，到明年这个时间或许有很多企业会因会计问题被摘牌。

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