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Well, kind of, but. The latest Reverse Merger Report
talks about the fact that short sellers have been focusing on alleged
differences between filings by public Chinese companies with their government
as compared to what is filed in the US with the SEC and made available to the
Audit experts point to the fact that the Chinese filings
being looked at are with the SAIC (State Administration for Industry and
Commerce). These filings are not reviewed by the government and are for
informational purposes. One expert indicated in the article that the SAIC is
more like the US State Secretaries of State. All agreed that looking at tax
filings would be more relevant than SAIC filings. Some companies do not want
competitors to have their detailed information. Others intentionally want to
appear smaller for various reasons. Also some may have different applicable
fiscal years. In addition, the article indicates that the SAIC filings
are not intended to be an exhaustive review of a company's financial picture.
All that said, it looks bad to third parties wondering
why filings are simply different, even if there may be reasonable
explanations. Clearly the lesson learned for all Chinese companies
planning in the future to go public in the US - focus on all PRC filings with
financial information to ensure that they are consistent with the financials
being filed in the US.
For additional insights on reverse mergers,
SPACs, other alternatives to traditional initial public offerings, the small
and microcap markets and the economy, visit the Reverse Merger and
SPAC Blog by David N. Feldman, Esq., Partner of Richardson &
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