Accounting Fraud and Abuse Still Widespread Among Listed Chinese Stocks (CMN)

As controversies (often created by short sellers) continue to trouble Chinese stocks like NQ Mobile Inc (NYSE: NQ), an overlooked podcast/video interview by the China Money Network of Bing Lin, a portfolio manager at Hong Kong-based US$1.4 billion-under-management Keywise Capital Management, is worth listening to as he talked about why he believes there are still many major overseas listed Chinese stocks with fraudulent accounting practices and how 2014 will be a great year for shorting certain overseas-listed Chinese stocks:

In the interview, Bing Lin commented:

Based on my experience and observation, I think there is still widespread accounting abuse among listed (Chinese) companies, even some large ones.

There are no strong forces in Asia, in general, to go against those companies. Due to culture issues and regulatory framework, hedge funds here have not been aggressive in pursuing those opportunities.

He also described in detail some of the specific types of accounting abuses or frauds at Chinese companies.

You can also read the transcript of the interview (Bing Lin: Accounting Abuse Among Listed Chinese Companies Still Widespread) on the website of China Money Network.

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