Releases

The SEC's efforts to halt new share offerings of two Chinese companies have fueled discussion on cross-border audit oversight. The stop order proceedings were initiated amid concerns over the accuracy of financial statements for China Intelligent Lighting and Electronics and China Century Dragon Media, but they are far from the only Chinese companies to draw attention for their corporate governance practices, says Gardere Wynne Sewell LLP attorney Suzanne Dixon of Dallas. "Sound accounting practices and the independence of directors are of paramount importance to sound corporate governance. Foreign companies, which bring with them different regulatory, governance and financial backgrounds and standards, may pose unique risks for U.S. investors," says Dixon. "Investors should continue to monitor trends with respect to corporate governance deficiencies and accounting fraud. The progress of talks regarding cross-border audit oversight, and whether shareholders are successful in efforts to obtain damages, will likely have a significant impact on future investments in Chinese companies."  For more information, contact Rhonda Reddick at 800-559-4534 or rhonda@androvett.com.