Big Four auditor Deloitte has resigned from Xiamen software manufacturer Longtop Financial Technologies, saying it discovered 'falsity' in the company's financial records.
New York-listed Longtop, which was advised on its 2007 initial public offering (IPO) by Goldman Sachs and Deutsche Bank, is the latest in a string of mainland companies listed in Hong Kong or New York, with eminent advisers, to become embroiled in accounting scandals.
Longtop also admitted, late on Monday, that it was under investigation by America's Securities and Exchange Commission (SEC) and that chief financial officer Derek Palaschuk had resigned.
Longtop told the New York Stock Exchange that Deloitte had quit because of 'recently identified falsity' in its financial records and 'deliberate interference' by Longtop management in the audit process.
Deloitte declined to comment, but the Longtop statement said the accounting firm had said 'continued reliance should no longer be placed' on its previous audit work.
This month, China Forestry, a Hong Kong-listed forestry company brought to the stock exchange by investment banks UBS and Cazenove and Big Four accountant KPMG, said its former chief executive Li Hanchun had been detained by mainland authorities for alleged embezzlement. The forestry firm, whose shareholders include United States buyout house Carlyle, also drastically slashed the value of its plantations.