Charles Li of the Hong Kong Exchanges & Clearing was on CNBC and said he believes Hong Kong will avoid the worst of accounting frauds and Chinese companies listed through reverse mergers in the U.S. wouldn't see the light of day in Hong Kong. He goes on to say, "“Regulation can always improve and it’s there to prevent detectable fraud, but when you have people that are determined to scheme the system, there’s only so much regulators and professionals can do. No matter how stringent your regulatory system works, the bad apples will still exist.” (source)
While accounting frauds of Chinese companies listed through reverse mergers in the U.S. are probably more egregious (and obvious), personally I think the number of accounting frauds of Chinese companies in Hong Kong is far more numerous and dangerous (as it is more sophisticated and has been allowed to brew for many more years).
Let's see if I can't do a little social services and help Mr. Charles Li a little.
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