This was my favorite article during the CCME drama. Back then you were vilified if you suggested saic had to equal sec.
Understanding SAIC and SEC Filing Discrepancies for U.S.
Listed China Based Companies – Avoid Being the Victim of
Stock Short Sellers
By Mr. Benjamin Wey
President of New York Global Group
Visiting Professor of Finance
Recently, some investors interested in investing in U.S. listed China based companies
have expressed concerns over discrepancies often found in the financial statements
between certain Chinese companies’ State Administration for Industry and Commerce
(SAIC) filings in China and their U.S. SEC filings. Investors often quickly conclude that
a company’s underlying operating entities in China must be fraudulent in inflating sales
and earnings, and that their SEC filings in the U.S. may not be relied upon for accuracy.
On the contrary, it is highly unusual and it should cause real concerns to investors if
SAIC filings DO match a public company’s SEC filings. Investors may lack basic
understanding of China’s corporate registration processes and therefore are comparing
very different items. It is important to understand why it would be incorrect and ignorant
to allege companies as frauds based on SAIC documents.
Based on New York Global Group’s 13 year office presence in China as well as our
in-depth understanding of the Chinese business practices, culture, and language, any
concerns over SAIC and SEC filing discrepancies are overblown and unnecessary. This
article intends to alleviate those concerns based on facts and our extensive knowledge of
China.
