Hong Kong Exchanges and Clearing (HKEx) said last night it had been keeping a close watch on troubled Euro-Asia Agricultural (Holdings) since July, when rumours surfaced about the quality of its management and its compliance with listing rules. Meanwhile, the Hong Kong Society of Accountants (HKSA) is interested in investigating the alleged accounting scandal involving the company but must wait until it receives a referral from the Securities and Futures Commission. Orchid grower Euro-Asia is alleged to have inflated its revenue by 20-fold when it applied for a Hong Kong listing, according to the mainland securities watchdog, the China Securities Regulatory Commission (CSRC). HKEx and SFC are already investigating the case. The HKEx has contacted the sponsor and auditor of the firm while SFC senior enforcement officials are understood to have discussed the case with the CSRC on a visit to Beijing. In a statement last night, HKEx said: 'Since 12 July we have made inquiries with the company on numerous occasions and requested it to make announcements, concerning share price fluctuations . . . investigation of possibly criminal acts in China by the chairman and his detention . . . and other price-sensitive information.' The HKEx said it would take appropriate action if it found the firm has breached listing rules. The company, controlled by its chairman Yang Bin, who is under house arrest over alleged illegal business activities, is suspected of falsifying its accounts to obtain a Hong Kong listing. According to a report in Money Times magazine on Monday, the CSRC said the company had exaggerated its revenue 21-fold for the four years to last year. The company said it had 2.1 billion yuan (about HK$1.96 billion) income between 1998 to last year but tax authorities found it was less than 100 million yuan. The auditor was Arthur Andersen's Hong Kong office, which has been taken over by accounting firm PricewaterhouseCoopers. A PWC spokesman refused to comment on the case yesterday. HKSA president Alvin Wong Tak-wai told the South China Morning Post that press reports about Euro-Asia had raised his suspicions. 'The society will not tolerate false accounting practices. We will conduct investigations into suspicious cases and will take action against wrongdoers to protect the integrity of the industry and the public,' he said. However, he said an investigation into Euro-Asia could not begin until it received a referral from the SFC or HKEx, as required by the law. HKEx said it had written to listing sponsor ICEA Capital and the company requesting they work together with the professional advisers - including PWC - to address the accuracy of accounting and the other information in the listing prospectus. The SFC last night also issued a statement saying its executive director Alan Linning and senior director Eric Cheng would be visiting the CSRC for a regular meeting this week. They would talk 'about recent topics of mutual interest'.