Home' A Plus Magazine : April 2013 Contents NEWS
12 April 2013
Consumer prices climb,
raising inflation fear
China’s consumer inflation reached a
10-month high in February, prompting
forecasts that monetary tightening might
be required in the second half of 2013. The
consumer price index rose 3.2 percent last
month year-on-year, pushed up by higher
food prices, the National Bureau of Statistics
Exxon Mobil plans auction
to offload Castle Peak stake
Exxon Mobil has hired Barclays to advise on
the sale of nearly half of its 60 percent stake
in Hong Kong-based Castle Peak Power Com-
pany. It comes as the American company –
the world’s biggest oil business by market
value – looks to divest non-core assets. Talks
to sell the entire stake to CLP Holdings and
state-owned China Southern Power Grid
had stalled due to disagreements over valu-
ations, Reuters reported last month.
Keyuan pays US$1 million
to settle securities charges
Keyuan Petrochemicals has settled securi-
ties fraud charges in the United States by
agreeing to pay a US$1 million fine. The Se-
curities and Exchange Commission accused
the China-based petrochemical company,
whose shares listed in the U.S . through a
so-called reverse merger, of not disclosing
related-party transactions involving its chief
executive and others, Reuters reported last
Ministry unveils plan to help
smaller businesses prosper
The Ministry of Industry and Information
Technology last month unveiled a plan to help
small- and micro-sized companies in the face
of greater operating pressures, rising costs
and financing difficulties since 2012. Prompt-
ed by the State Council, China’s cabinet, the
ministry said it would promote the growth
quality and efficiency of those enterprises by
supporting more than 500 finance guarantee
firms and training for 500,000 management
The All-China Federation of Trade Unions, China’s state-sponsored labour
organization, is planning to expand into the Big Four accounting firms and their
40,000 employees in the Mainland, media reported last month.
The Chinese affiliates of Deloitte Touche Tohmatsu, Ernst & Young, KPMG
and PricewaterhouseCoopers will be gradually unionized in a programme that
began after a January decision to extend workers’ membership into all the large
international companies based in Shanghai.
The Shanghai branch of the ACFTU had already established chapters in more
than 80 percent of 10 foreign companies, the union’s website claims.
Foreign experts played down the significance of the unionization. “It tends
to be more about establishing social order and providing connection between
employees and the [ruling Communist] party and not about bargaining for labour
rights,” Paul Gillis, visiting professor of accounting at Peking University’s Guang-
hua School of Management told Reuters.
China’s labour contract law states that, in any company that has more than 25
employees, workers have the right to request a union chapter.
China plans unionization push
into Big Four accounting firms
IPO fraud case sparks harsher punishment
The China Securities Regulatory Commission announced last month that it
had handed down its most severe punishment to date to an intermediary of an
initial public offering.
The regulator said that Shenzhen Pengcheng Certified Public Accountants
Company had failed to conduct due diligence during its audit of Yunnan Green-
Land Biological Technology Company. The technology company was later
found to have provided false information on assets and income when it was
preparing for an IPO in 2007.
Two other companies involved in the IPO – underw riter United Securities
(now Huatai United Securities) and the Sichuan Chengtianmen law firm – also
failed to conduct due diligence, according to the regulator.
The CSRC said it would revoke Shenzhen Pengcheng’s securities business
licence. The Global Times commented that the decision has been seen as a warn-
ing to companies and an effort to restore professional ethics.
The CSRC decision follows a ruling in February by Kunming Intermediate
People’s Court that Yunnan Green-Land had committed IPO fraud, by fabricat-
ing financial statements and intentionally destroying accounting documents.
The company was fined 10.4 million yuan, while chairwoman He Xuekui was
sentenced to 10 years in prison and fined 600,000 yuan.
The Shenzhen Institute of Certified Public Accountants, a municipal super-
visory body, issued a circular on its website calling for professionals to increase
CPA firm’s securities licence
revoked over due diligence
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