Replies to post #25300 on China MediaExpress Holdings, Inc. (fka CCME)

[mlkrborn]

NEW YORK (TheStreet) -- A day after China MediaExpress(CCME_) revealed that its former auditor believes the company is worthy of an investigation into possibly dubious accounting practices, a handful of small-cap Chinese stocks sold off sharply.

Fraud allegations have buffeted share prices among these names since last year, as more of the investing public begins to doubt the integrity -- rightly or wrongly -- of financial statements emanating from the People's Republic.

Of course, on Tuesday, the nuclear crisis in Japan and the broad and vicious slide in equities around the world didn't help Chinese small-cap names.

[barsell]

The idea that the auditors resigned out of fear is reasonable except that it does not explain the termination of the CFO. The only theory consistant with all the facts is that Jacky embezzeled funds by using his position to alter the books. The auditors after discovering the discrepancies in the financials were forced to resign because they could not rely on them. And that is exactly what they said.