Moody’s Investors Service on Tuesday identified “red flags” involving accounting and governance issues at several Chinese companies, sparking a record share-price drop in one company mentioned and big declines in others.
The ratings agency said its report was intended to help shed light on high-yield Chinese companies that it rates, excluding financial companies, and acknowledged growing concerns in the U.S. and elsewhere over the issue.
Moody’s said it had undertaken a screen of the 61 Chinese companies — listed in mainland China, Hong Kong, or on U.S. or European exchanges — in response to investor concerns and to “provide transparency on our approach to ratings”.
The screen looked at five areas that “highlight issues meriting scrutiny to identify possible governance or accounting risks,” Moody’s said in the report, written by analysts headed by Elizabeth Allen in Hong Kong. -MarketWatch
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