A quick check has showed that share prices of nine out of 10 China-based companies that are listed on local exchange have tumbled below their IPO prices. The decline in share price could be as much as 96%. Most of them are literally penny stocks which are trading below 10 sen.
In May, Bursa warned that it would suspend shares of two Chinese firms — Maxwell International Holdings Bhd and Multi Sports Holdings Ltd — from trading if both companies failed to submit their latest annual reports before deadline.
For Maxwell, it has fallen into the Practice Note 17 status after external auditor Baker Tilly Monteiro Heng expressed a disclaimer of opinion in its audited financial statements for the financial year ended Dec 31, 2015 (FY15).
Multi Sports, another footwear producer has delayed the submission of its annual report and audited statements for FY15, citing the delay was caused by “additional works” by external auditors.
In 2013, China Stationery Ltd caught fire. The fire destroyed the stationary maker’s accounting books. Since the incident, the company’s earnings have not recovered to the previous levels.
Financial scandal or economic downturn? Read more here.
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