The disaster that has become U.S.-listed Chinese small-cap stocks continues to amaze. According to the Nasdaq website, 12 stocks halted since the beginning of April remain halted today. Eleven of them are Chinese.

The list includes familiar names for those following the mess, including Longtop Financial (NYSE: LFT) and Duoyuan Global (NYSE: DGW), as well as lesser-known names like China Ritar Power (Nasdaq: CRTP) and Jiangbo Pharmaceuticals (Nasdaq: JGBO). China-Biotics (Nasdaq: CHBT) and Yuhe International (Nasdaq: YUII) joined them over the past week.

I'd like to focus for a moment on Yuhe, because the story behind its halt is so, well ... Let's just say that while many colorful words could apply, few are fit to print on a family-friendly website.

As I was perusing new SEC filings today, I ran across a just-released letter to Yuhe from its auditor, Child, Van Wagoner & Bradshaw. It read:

Based on management's misrepresentation and failure to disclose material facts surrounding certain acquisition transactions and off balance sheet related party transactions, our auditor's report on the financial statements of Yuhe International, Inc. ... for the year ended December 31, 2010 ... should no longer be relied upon and must no longer be associated with the financial statements.

Ouch, right? But wait, it gets better! On June 17 (the date of the auditor's letter), the company held a conference call with shareholders to clear up a bit of a misunderstanding. Paraphrasing here, the company said that in 2009, it had agreed to buy 13 breeder farms to expand its chicken business. The CEO ended up in a disagreement with the seller, and the transaction didn't go through. He didn't tell the CFO or board of directors. Instead, he went out and negotiated to acquire 13 different breeder farms.

All good, right? Not even close. But if the situation itself isn't funny enough, here's the company's chief accounting officer's explanation of why the CEO did what he did:

Since we had a contract signed with Dajiang and the contract was disclosed, we worried that the cancellation of the contract and refunded cash would provoke negative reactions from the capital market, so that we decided to reside the money in a private Company under Yuhe Group.

That sounds an awful lot like something we'd hear from Dennis the Menace:

Since my parents had paid a lot of money for the lamp in the living room, I was worried that they would be angry when they found out that I broke it by throwing the football in the house. So I decided to sweep the pieces under the rug and see if I could find another lamp that looked similar.

Way to set a high bar for professionalism, guys.

Even if we suspend both disbelief and all of the concerns about possible outright fraud (which Yuhe could have trouble shaking), it's very clear that many of these companies don't seem ready to trade publicly, period, let alone on a foreign market in another country with different rules, different cultural and business norms, and a different language.

I remain tempted to think investment opportunities must lurk somewhere in this mess. But with each passing day, and each bizarre story like Yuhe's, I'm further convinced that with plenty of unencumbered cheese sprinkled all over the world's public markets, there's little reason to stick my hand into these industrial-strength rat traps.