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Bloomberg Moody’s Sparks West China Cement Rout on ‘Red Flags’ Report July 12, 2011, 3:35 AM EDT July 12 (Bloomberg) -- Moody’s Investors Service cited five Chinese companies as having more “red flags” on corporate governance than others it examined, sending shares of West China Cement Ltd. to a record decline. The ratings company looked at criteria that “highlight issues meriting scrutiny to identify possible governance or accounting risks,” analysts led by Elizabeth Allen in Hong Kong wrote in a report issued yesterday. All 61 companies Moody’s examined raised “red flags,” with West China Cement, Winsway Coking Coal Holding, China Lumena New Materials Corp., Hidili Industry International Development Ltd. and LDK Solar Co. cited as “negative outliers.” These companies all raised at least nine out of 20 possible red flags, more than were raised by Sino-Forest Corp., the tree- plantation owner that fell 83 percent last month after being targeted by short seller Carson Block. West China Cement Chairman Zhang Jimin’s 41 percent stake in the company, cited as having the most red flags, dropped by as much as HK$1.3 billion ($167 million), according to data compiled by Bloomberg. “Investors have already been nervous about this kind of news and it’s making them lose confidence in some private Chinese companies,” said Ben Kwong, chief operating officer at KGI Asia Ltd. “In the short term, investors will be more prudent in investing in them.” Sin Lik Man, West China Cement’s board secretary, said that the company is “absolutely” in line with international financial reporting standards. ‘Misleading’ Report “I disagree with Moody’s claim and think it is misleading,” Sin said by telephone today. Huang Lanyi, Hidili Industry’s board secretary who is in charge of investor relations, said by phone today that the Moody’s report is “not based on fact.” LDK Solar spokesman Frank Yao said he couldn’t immediately comment on the report. Winsway Coking Coal issued a statement to Hong Kong’s stock exchange today saying the company had taken notice of the Moody’s report and that it doesn’t believe it appropriate to comment at this moment. Calls to China Lumena New Materials offices in the city of Chengdu went unanswered and an employee at its Hong Kong office, who refused to give her name, declined to comment. Stan Neve, an external spokesman for Sino-Forest in New York, declined to comment. Shares of West China Cement fell 10.3 percent to HK$2.54 yuan as of 2:13 p.m. in Hong Kong, poised for the biggest drop since its listing in August 2010. Bond Yields Yields on West China Cement’s $400 million of 7.5 percent bonds due January 2016 jumped 85 basis points to 9.434 percent as of 9:48 a.m. in Hong Kong. That’s the biggest jump since June 8 and set for the highest level since June 27, according to Royal Bank of Scotland Group Plc prices. Moody’s didn’t change debt ratings on any of the companies in its report. “We don’t find the results surprising, in a way, because the issues we flagged are issues we are aware of and are in the rating,” Moody’s analyst Allen said today by telephone. “We are not looking at new information and saying these make these companies look more or less risky.” West China Cement’s chairman and his daughter own 44 percent of the shares, it’s changed auditors twice and had inadequate compliance with International Financial Reporting Standards before listing in Hong Kong in August 2010, Moody’s said in its report. Board Secretary Sin said West China Cement switched its auditor to PricewaterhouseCoopers LLP so it could list shares in Hong Kong and then switched to Deloitte Touche Tohmatsu “purely due to lower costs.” The chairman and his daughter’s stake in the company “poses no risk at all,” Sin said. --With assistance from Sapna Maheshwari in New York, Christopher Donville in Vancouver, Katrina Nicholas in Singapore and Emma Dong, Charles Li and Feifei Shen in Beijing. Editors: John Liu, Mohammed Hadi To contact the reporters on this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net Mohammed Hadi in Hong Kong at mhadi1@bloomberg.net |
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| aus der Diskussion: | West China Cement profitiert vom Baumboom Chinas - 586 Mrd. $ für Infrastruktur! |
| Autor (Datum des Eintrages): | ZenoCyprus (24.07.11 22:29:13) |
| Beitrag: | 94 von 94 (ID:41837295) |
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