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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4024)	12/31/2004 3:34:07 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

SEC steps up probe into China Life By Andrew Parker in New York and Francesco Guerrera in Hong Kong Published: December 29 2004 21:59 \| Last updated: December 29 2004 21:59 US regulators have stepped up their investigation into China Life, China's biggest life assurer, which gained a listing in New York and Hong Kong last year. The Securities and Exchange Commission has upgraded an informal inquiry into the circumstances surrounding China Life's initial public offering to a formal investigation, according to people familiar with the matter. China Life raised $3.4bn in New York and Hong Kong last December in what was the world's biggest IPO in 2003, but it has provoked lawsuits over alleged failures to disclose accounting irregularities. The SEC's move will reinforce fears among Chinese companies that US regulators are taking a tough stance against foreign businesses. The investigation could also derail China Life's search for a partner to help it improve its operations and risk management. Once an informal inquiry is upgraded to a formal investigation, staff at the SEC enforcement division can compel witnesses to testify and hand over documents. People involved in China Life's listing confirmed the SEC had contacted them. “They got in touch and wanted to have all our documents and all that was stored in our laptops,” said a person close to the China Life IPO. “After dismissing it at first, people are getting more and more worried,” said another person involved in the listing. The SEC declined to comment. Credit Suisse First Boston, Citigroup and Deutsche Bank, the IPO's international underwriters, also declined to comment. China Life's listed unit was unavailable for comment, and its state owned parent company has never spoken about the investigation. The SEC is looking into the IPO in its role as the guardian of US investors. In February, China's national audit office said it had uncovered accounting irregularities of Rmb5.4bn ($652m) at China Life's state owned parent company during 2003. This prompted a series of lawsuits in the US that alleged China Life violated securities laws by not disclosing the investigation in the IPO prospectus. In April the parent company agreed to pay Rmb67.5m in back taxes and fines. China Life's listed unit said in April that the alleged irregularities predated the group's restructuring for the IPO, and vowed to contest the lawsuits. news.ft.com