Deloitte Touche Tohmatsu's global chief executive yesterday defended the accounting firm's role as auditor of troubled Guangdong Kelon Electrical Holdings in response to reports that the auditor might face punishment from China's securities regulator.
'I have no reason to believe that any of our people were involved in creating, causing or participating in the problem of Kelon,' said William Parrett on the sidelines of the Boao Economic Forum. 'I think when all the facts come out, people will understand the good work Deloitte has done there.'
In September last year, former Kelon executives, including its chairman Gu Chujun, were arrested and accused of inflating sales and embezzling hundreds of millions of yuan.
The China Securities Regulatory Commission is investigating the company's financial reporting between 2002 and 2004.
Deloitte was the auditor for 30 months between 2002 and 2004 but the firm qualified its opinion in 2004 as to company sales, returns and allowances and resigned from the account after that audit.
'The reason we resigned from the account was because we said management was not committed to good or strong financial reporting and financial controls,' Mr Parrett said.