Originally posted by wrkn4livn
What's really got me concerned is the recent news that China has pulled all their money out of the US stock market.
I think you are taking that article way out of context.
If you look at it closer you will see that they are claiming their stock was "undervalued" and that they believed it demands a higher price, and then
cite accounting issues.
This does not mean that every private Chinese national who invests $ is pulling their money out. It simply means that the actual firms selling stock
(Focus Media, Fushi Copperweld, China TransInfo Technology Corp, Harbin Pacific Electric Co) wanted more money for each share.
Also keep in mind what this fellow states:
U.S.-traded Chinese companies faced scrutiny after auditors for several quit and others were accused of accounting irregularities. Concerns about
company finances have caused share prices to tumble, costing investors several billion dollars. "Probably all these companies have some questionable
accounting, so they may prefer to move out of the U.S., not to come under too much scrutiny," said Marc Faber, managing director of Hong Kong fund
management company Marc Faber Ltd.
He is subtly claiming they are crooks and their decision to pull out is a result of their fears of scrutiny.
A financial firm, Muddy Waters Research, accused Focus Media last year of overstating the number of its display panels and questioned acquisitions
reported by the company. Focus Media denied the allegations and said independent auditors confirmed the size of its network.
This week, Muddy Waters founder Carson Block said in a statement: "The markets are far better off if a few deep pocketed investors own Focus Media
instead of mutual funds and other public shareholders." The group proposing to take the company private includes its chairman, Jason Nanchun Jiang,
and private equity firms Carlyle Group, CITIC Capital Partners, CDH Investments and China Everbright Ltd.
Carlyle Group, CITIC, CDH? This looks really questionable on the surface.
Also keep in mind this article is about 1 major firm, Focus Media Holding Ltd., while only briefly about a few other firms
, which claims it's a massive advertising corporation. It then gives more detailed
information on the allegations made against them, and links us to the Reuters source.
In November 2011, Muddy Waters Research reported massive fraud at the company. It alleged that
- the company has been fraudulently overstating the number of screens in its LCD network by approximately 50%,
- has claimed to acquire, write down, and dispose of companies that it never actually purchased,
- has written at least 21 acquisitions down to zero and then given them away for no consideration,
- has been used by insiders as their counterparty in trading in and out of subsidiary Allyes, with several individuals earning a total of at least
$70.1 million, while shareholders lost $159.6 million.
Focus denied the allegations.
Look I don't know if this company was really committing fraud to rob the investors, but it seems possible and dare I say, normal procedure on Wall
The other companies such as China TransInfo Technology Corp, Harbin Pacific Electric Co, were apparently "privatizing" and had major reorganization
issues which were the reason for their pullouts, etc.
It's clear to me that you totally misconstrued it out of context, which I assume was accidental and a result of lack of pertinent information.
Hopefully my brief and limited analysis will aid in alleviating your "concerns", and putting them back into a more proper context.
17-8-2012 by muzzleflash because: (no reason given)
edit on 17-8-2012 by muzzleflash because: (no reason given)
on 17-8-2012 by muzzleflash because: (no reason given)