The SEC has halted the trading of China Medical Technologies' ($CMEDY) American depository receipts for two weeks, pointing to concerns over the accuracy of the company's public disclosures, Bloomberg reports.
U.S. trading of the Chinese devicemaker's shares is suspended until July 13 as the SEC examines "questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things," according to a statement from the SEC. That also includes "the status of the company's officers and directors [and] the accuracy of the company's financial statements and filings with the Commission."
The suspension is yet another indignity in what seems like a death spiral for China Medical. Last month, as its depository receipts plummeted over two days, China Medical faced a petition from bondholders looking to liquidate the company entirely. Before that, in December, China Medical faced allegations that it was defrauding investors, with Glaucus Research Group claiming the company's balance sheet "presents numerous highly suspicious red flags."
The issue underscores a common concern for investors in Chinese firms: Their financial reporting and corporate governance are tough to trust, according to an analyst quoted by Bloomberg, and, as more and more Chinese companies have been delisted or suspended over the past two years, some Western investors are shying away.
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