Chaoda says auditors had 'no objection' to release

PUBLISHED : Friday, 25 October, 2002, 12:00am
UPDATED : Friday, 25 October, 2002, 12:00am

Chaoda Modern Agriculture (Holdings) says its auditors gave it a verbal go-ahead to release its financial results as 'audited' figures on Monday and only called for more information after the firm had made its announcement.

The Fujian-based agricultural firm has been the subject of intense market speculation after it was revealed PricewaterhouseCoopers (PwC) had not signed off on accounts that showed a 41 per cent increase in net profit for the year ended June 30.

Chaoda said in a statement last night that PWC called for more detail on Monday afternoon after financial information, relating to its two principal mainland subsidiaries and filed with the State Administration for Industry and Commerce, came to the auditors attention.

Chaoda says it received verbal authority from PwC that it had 'no objection' to releasing its accounts as audited and unqualified when the firm's board met at 10.30am on Monday.

Chaoda released a partial results announcement at lunchtime on Monday in a move that drew ire from the stock exchange which said an investigation into the firm's disclosure was needed.

The firm said PwC needed more time to work on the new information and a full set of accounts was scheduled to be released on or before October 30.

The Hong Kong Society of Accountants (HKSA) has expressed concern about the dispute between Chaoda and its auditor.

HKSA vice-president David Sun Tak-kei said: 'We want to follow up the case as it has become the focus of attention in the community. 'This is an unusual type of incident.'

He said that while Chaoda and PricewaterhouseCoopers might have divergent views over the results, they might only be the result of a breakdown in communication.

'We don't have much information about what has happened between the two parties,' he said.

The comments follow an earlier HKSA indication of interest in investigating Euro-Asia Agricultural (Holdings), which is at the centre of an alleged accounting scandal.

Mr Sun said Hong Kong Exchanges and Clearing (HKEx) and the Securities and Futures Commission (SFC) could refer the Chaoda case to the HKSA if they were not satisfied with the company's explanation.