Beijing-based education company GSX Techedu Inc (跟誰學) said it is being investigated by the US Securities and Exchange Commission (SEC), the latest case as US-listed Chinese companies face greater scrutiny on accounting issues amid rising tensions between the two countries.
The SEC’s Division of Enforcement contacted GSX asking it to produce financial and operating records dating from Jan. 1, 2017, GSX said in its second-quarter earnings statement on Wednesday.
GSX said it is cooperating with the SEC.
The firm said that its audit committee already engaged third-party advisers to conduct an internal investigation into allegations about its finances made by short-sellers, including Muddy Waters and Citron Research, earlier this year.
GSX shares fell 12 percent in US trading, the most in almost a month.
The online education company, which provides after-school tutoring services, is the latest case being investigated as US President Donald Trump’s administration threatens to delist Chinese firms that fail to meet US audit standards. The issue has gained urgency amid rising geopolitical tensions.
An accounting scandal at Luckin Coffee Inc (瑞幸咖啡) in April also shined a spotlight on the risks of Chinese companies listed in the US. Following an internal investigation, Luckin disclosed that fabricated transactions had inflated its revenue last year by about US$300 million.
A high-powered group of US regulators last month said that stock exchanges should set new rules that could trigger the delisting of Chinese companies, following mounting concerns that investors are being exposed to frauds.
The President’s Working Group on Financial Markets said that firms must grant US regulators access to their audit work papers in order to trade on a US exchange.
The recommendations target a problem that has vexed US regulators for more than a decade: China’s refusal to allow inspectors from the Public Company Accounting Oversight Board to review audits of Alibaba Group Holding Ltd (阿里巴巴), Baidu Inc (百度) and other firms that trade on US markets.
Chinese regulators last month said that they would be open to the idea of joint audits.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RECORD LOW: Global firms’ increased inventories, tariff disputes not yet impacting Taiwan and new graduates not yet entering the market contributed to the decrease Taiwan’s unemployment rate last month dropped to 3.3 percent, the lowest for the month in 25 years, as strong exports and resilient domestic demand boosted hiring across various sectors, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. After seasonal adjustments, the jobless rate eased to 3.34 percent, the best performance in 24 years, suggesting a stable labor market, although a mild increase is expected with the graduation season from this month through August, the statistics agency said. “Potential shocks from tariff disputes between the US and China have yet to affect Taiwan’s job market,” Census Department Deputy Director Tan Wen-ling
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