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A credit ratings agency has said that fraud accusations will likely continue against Chinese firms listed in foreign stock markets. This warning comes after a number of accounting scandals.
Ratings agency Fitch warned in a report on Monday that Chinese companies will continue to be hit by fraud accusations.
Fitch told the Associated Press, (quote) "Some of the accusations will be legitimate; some will be erroneous; many will be a mixture."
Fitch says they're targeting Chinese companies for several reasons, including poor corporate governance and lack of transparency.
Many overseas-listed Chinese companies have already been hit by fraud accusations—companies like Canadian-listed Sino-Forest. That company’s shares dropped 70 percent after Muddy Waters Research issued a damning report, saying the company had overstated assets by billions of dollars.
The US Securities and Exchange Commission has stopped the trading of several U.S.-listed Chinese firms so far this year. Last week, Moody’s ratings agency assigned “red flag” warnings on 61 Chinese companies.
