Fitch Expects More Fraud Allegations Against Chinese Companies

Posted July 18th, 2011 at 8:40 am (UTC-5)
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A U.S. credit ratings company says allegations of accounting irregularities at Chinese companies traded in the United States are likely to continue.

Fitch Ratings analyzed 35 U.S.-listed Chinese companies and said in a report Monday that they have an above average risk of facing fraud allegations.

Fitch reviewed the companies after a series of allegations of corporate fraud at other Chinese companies sparked a sell-off in China-related equities.

The review said that negative investor sentiment many continue in the short term as investors identify weak accounting or corporate governance standards at Chinese companies.

Fitch’s study follows a report from Moody’s Investors Service last week which raised similar concerns about Chinese companies.