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.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence