Not again! Not another Chinese small-cap company that was claiming to be something it wasn't. This week A-Power Energy
Nasdaq halted shares on Monday because of a lack of information, and Yahoo! Finance is quoting A-Power's shares at a big fat zero right now.
MSCM is the auditor that quit, and considering the company's affiliation with Moore Stephens, this mess shouldn't be a surprise. A Moore Stephens affiliate was censured by the Securities and Exchange Commission for its involvement in another Chinese scam, China Energy Savings, one of the few companies actually facing fraud charges right now.
This shouldn't come as a surprise to anyone who has watched Rino International, China MediaExpress, Puda Coal
I'm not even sure if we know whom we can trust in China. The list of companies whose financial statements we can't trust seems to get longer by the day. And with so many questions surrounding some Chinese stocks, it's reasonable to assume all Chinese stocks will be devalued for fear their company is next.
So what are shareholders of A-Power Energy left with? If Puda Coal, Longtop Financial, and others are any hint -- maybe nothing. Shares in those companies haven't traded since Nasdaq yanked them, and there's no sign of life.
Cautions like "buyer beware" may not be enough in China any more. Just stay away all together. No company seems to be safe.