Real Gold Mining Says Deloitte Resigns as Auditor Over Omissions
Oct. 14 (Bloomberg) -- Real Gold Mining Ltd., a Hong Kong- listed Chinese gold producer halted from trading since May 27, said Deloitte Touche Tohmatsu quit as auditor because the company failed to disclose “material” information.
Deloitte said its report on Real Gold’s 2010 earnings isn’t reliable because of the omissions, according to a Hong Kong stock exchange filing yesterday. Real Gold said it previously disclosed all matters related to the resignation, is “disappointed” by the accounting firm’s departure and is seeking a replacement auditor.
Real Gold has been suspended in Hong Kong since the city’s South China Morning Post newspaper said the company may have filed two different sets of accounts. Real Gold was searched by the city’s Securities and Futures Commission in August, according to a lawsuit. It has hired an independent forensic specialist to probe company accounts and dealings with controlling stockholder Wu Ruilin.
Regulators and investors have increased scrutiny of Chinese companies traded overseas amid allegations against Longtop Financial Technologies Ltd., Chaoda Modern Agriculture (Holdings) Ltd. and Sino-Forest Corp.
Real Gold said on June 20 it was released from loan pledges made improperly by Wu. The entire issued share capital of Real Gold unit Fubon Industrial Huizhou Co. was pledged as security for loans for non-Real Gold entities controlled personally by Wu.
Connected Purchase
The company also agreed to buy two phosphorus mines in Mongolia from Wu for HK$520 million ($67 million) and loaned him HK$955 million, of which HK$316 million was outstanding on June 30, according to an exchange filing on Aug. 22.
Real Gold said on June 1 the Morning Post’s allegations were “inaccurate and untrue,” and that it was gathering information to respond to queries by the Hong Kong exchange.
The mining company said on Aug. 25 that Independent Director Wan Kam To, who was leading an internal investigation of the allegations, resigned after disagreeing with the board on the approach, strategy and timing of the probe.
Real Gold’s first-half net income increased to 355.2 million yuan ($55.7 million) from 322 million yuan a year earlier.
--Editor: Joshua Fellman, Donna Alvarado
To contact the reporters on this story: Billy Chan in Hong Kong at bchan101@bloomberg.net; Joshua Fellman in New York at jfellman@bloomberg.net
To contact the editor responsible for this story: Richard Frost at rfrost4@bloomberg.net
Deloitte said its report on Real Gold’s 2010 earnings isn’t reliable because of the omissions, according to a Hong Kong stock exchange filing yesterday. Real Gold said it previously disclosed all matters related to the resignation, is “disappointed” by the accounting firm’s departure and is seeking a replacement auditor.
Real Gold has been suspended in Hong Kong since the city’s South China Morning Post newspaper said the company may have filed two different sets of accounts. Real Gold was searched by the city’s Securities and Futures Commission in August, according to a lawsuit. It has hired an independent forensic specialist to probe company accounts and dealings with controlling stockholder Wu Ruilin.
Regulators and investors have increased scrutiny of Chinese companies traded overseas amid allegations against Longtop Financial Technologies Ltd., Chaoda Modern Agriculture (Holdings) Ltd. and Sino-Forest Corp.
Real Gold said on June 20 it was released from loan pledges made improperly by Wu. The entire issued share capital of Real Gold unit Fubon Industrial Huizhou Co. was pledged as security for loans for non-Real Gold entities controlled personally by Wu.
Connected Purchase
The company also agreed to buy two phosphorus mines in Mongolia from Wu for HK$520 million ($67 million) and loaned him HK$955 million, of which HK$316 million was outstanding on June 30, according to an exchange filing on Aug. 22.
Real Gold said on June 1 the Morning Post’s allegations were “inaccurate and untrue,” and that it was gathering information to respond to queries by the Hong Kong exchange.
The mining company said on Aug. 25 that Independent Director Wan Kam To, who was leading an internal investigation of the allegations, resigned after disagreeing with the board on the approach, strategy and timing of the probe.
Real Gold’s first-half net income increased to 355.2 million yuan ($55.7 million) from 322 million yuan a year earlier.
--Editor: Joshua Fellman, Donna Alvarado
To contact the reporters on this story: Billy Chan in Hong Kong at bchan101@bloomberg.net; Joshua Fellman in New York at jfellman@bloomberg.net
To contact the editor responsible for this story: Richard Frost at rfrost4@bloomberg.net
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