Asia Bankers' Counsel Poll 2010

Author: | Published: 1 Feb 2010

Rachel Evans
Asia editor

"I've heard war stories from people on things getting missed in diligence, such as a Chinese company that falsified receipts to inflate returns. Banks could face regulatory action if they don't kick the tyres adequately."

So said one in-house lawyer on hearing the news in November that China Zhongwang was being audited over accusations that it falsified information for its $1.26 billion Hong Kong initial public offering (IPO). Mis-statements were allegedly made about the company's customer base in the prospectus Zhongwang filed in May.

Banks have always been concerned that they might miss something in diligence. In IFLR's 2007 Asian Bankers' Counsel Poll, 45% were not happy with the disclosure made by Chinese companies when listing. But these fears seem to have been exacerbated by the downturn and the pressure to do deals while the market is rallying....