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Chinese IPOs Under Fire

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    Author Gordon Chang on the growing debate surrounding Chinese stocks.

  • Duration 3:07
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More questions being raised about -- talk that company and indeed about investing in China generally.

And now we have this a Chinese company has failed to IPO and -- was the IPO offering totally failed could not attract any new investors.

Gordon Chang is here to discuss this more hello and welcome you are -- foremost authority on China welcome back to the program.

Thank you very much Stewart I don't wanna get -- down in the details of Sino forest or any other single Chinese stock but the big question which a lot of our viewers wanna know about is -- Can you trust Chinese financials.

Chinese companies when they come here and -- -- listed on the New York exchange.

Can you trust them that they've got the -- that they say they've gone off what are you -- I really don't think that you can.

You cannot build a fortune in China without committing high crimes and misdemeanors so these guys lie cheat and steal every day you think they're gonna be honest with auditors with underwriters with regulators.

I don't think so.

So can we trust is that we we can't trust the financials.

You've called for you said that collapse -- -- told about the coming collapse of China.

Is this a back -- what he -- collapsed because we can't trust the financials is it.

-- I think that this is is on around related I mean China is gonna fail for a number of very important reasons the fundamentals in the economy really are very bad right now.

The economy is slowing at the same time that it's suffering from the consequences of high growth which are inflation and property bubbles and the political system is in paralysis and people are upset but.

That's different from what's happening now.

In it with regard to Sino forest and all of these other companies because you know people have wanted to believe the China story.

And and you know essentially what's going on is that they've been lied to.

In my practice law in Hong Kong.

-- -- -- I I'd just I just wanna break him for a second because it Tracy is what this traces.

Not published accountant.

But she says look if you send American accountants over the China.

To check out whether or not they got the asses that the company says it's gotten you'll get a straight answer veteran.

That's absolutely sure you know the same thing with Sino forest it's said that it had a 186000.

-- acres in Yunnan -- it probably has only 20000 it's very interesting that you got this small outfit called Muddy Waters were search which is able to uncover all of this stuff that Goldman Sachs and and price Waterhouse Coopers and they just can't find it and so it's very interesting that when you go there -- you actually start digging through the records.

You find that companies like Sino forest have really not been telling the truth to the markets and that's really going to be a problem because it's not just Sino forest it's all of these companies -- to Gordon Chang.

The man who predicted the coming collapse of China has been predicting if it's any ads on my dad analysts if you -- that it was gonna dog doggone it -- I -- it was gonna -- car this year so I spoke a little time left huge -- defeat Gordon Chang thanks so much going good stuff.

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