Wednesday, January 2, 2013
US securities regulators have been engaged in a long struggle to obtain the workpapers of auditors of Chinese companies listed in the US, and last month the SEC initiated administrative proceedings against the Chinese affiliates of five big accounting firms (NYT story, plus useful background, here.)
In related proceedings, the SEC subpoenaed documents from Deloitte Touche Tohmatsu CPA, Ltd. (DTTC), the Chinese auditors of Longtop Financial Technologies, a Chinese company whose financial statements were apparently less than totally accurate.
DTTC has been fighting the subpoena on the grounds that it is liable to punishment under Chinese law if it provides the documents the SEC is seeking. Below are links to relevant court filings that look at the Chinese law issues here. I produced an expert witness declaration in support of the SEC's position in this matter and so my own views are stated there. The expert witness declarations in support of DTTC's position were produced by my colleagues (and as it happens my good friends) Prof. Tang Xin of Tsinghua University Faculty of Law and Prof. James Feinerman of Georgetown University Law School.
- DTTC's brief in opposition to the subpoena (April 11, 2012)
- SEC's brief in reply to DTTC's brief (Dec. 3, 2012)
- Regulation 29 (This is a key document relevant to the Chinese law issues and discussed in the filings)