China Stocks

[Gamma1848]

CHU: "inadequacies" in procurement and accounting

CHU hit 30 month highs on Friday and its puts are still very reasonably priced (implied vol less than 40). I am getting short via the puts


"China Unicom (CHU) said on Friday that an audit of China Unicom's state-owned parent company had identified improper practices by the parent company in 2009. These include "inadequacies" in procurement procedures and accounting procedures, China Unicom stated. However, the telecom company said that it had implemented a number of measures designed to rectify the improper practices. China Unicom said that the past improper practices would have no material impact on its operating results, financial statements, audit opinion and internal control assessments. In a note to investors today, Wedge Partners wrote that China Unicom is facing significant financial reporting issues, and that the shares would be significantly hurt by Friday's news. In mid-morning trading, China Unicom dropped 86c, or 4.05%, to $20.38. :theflyonthewall.com"

http://www.theflyonthewall.com/permalinks/entry.php/CHUid1433771/CHU-China-Unicom-sinks-after-audit-finds-improprieties-at-parent-company