The stakeholders of US listed Chinese firm
China Expert Technology were given the go ahead to proceed with a
suit against its auditors PKF Hong Kong, PKF New York and BDO
McCabe Lo, according to Reuters.
China Expert Technology shareholders have
accused the auditors of failing to detect an alleged $132m in fraud
carried out by the company.
After three years of unsuccessful litigation
and three dismissals due to inadequate claims US District Judge
Alvin Hellerstein in New York has now allowed the suit to
proceed.
This case is one of many involving Chinese
companies listed in the US that have been involved in financial
irregularities.
Earlier this year Deloitte quit as the auditor
of Longtop Financial Technologies after discovering falsified
financial records, including sales revenue and cash at bank and
loan balances.
In order for the shareholders of China Expert
Technology to be successful in this suit they still have to prove
the auditors knew of the alleged fraud.
BDO International refused to comment on the
latest developments due to ongoing legal proceedings and PKF Hong
Kong and New York did not respond to our calls.
