UPDATE: Ambow Education (AMBO) trading halted with news pending

March 22, 2013 11:25 AM EDT
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(Updated - March 22, 2013 11:30 AM EDT)

Ambow Education Holding (NYSE: AMBO) trading halted with news pending.


According to an earlier news release, Ambow announced that its registered independent accounting firm, PricewaterhouseCoopers Zhong Tian CPAs Limited Company, has resigned as auditor of the Company by a letter dated March 22, 2013. The Company also announced that Fenwick & West LLP resigned as counsel to the audit committee of the Company, which has conducted an investigation since July 2012 into allegations made by a former employee of the Company of financial impropriety and wrongful conduct in connection with the Company's acquisition of a training school in 2008 and other issues.

The release continues:

In its letter, PWC stated it was resigning as a result of its concerns that the Investigation may not be given the necessary resources and time, and the presence of existing management may make conducting an investigation of the scope that PWC believes is warranted unlikely. PWC also stated it has not reached any conclusions in connection with the Investigation, which is still ongoing, although it is possible the ultimate outcome of the Investigation and any remediation effects by the Company might have caused PWC to seek additional information, conduct additional procedures and may have caused PWC to conclude that the Company's previously issued financial statements and its opinions thereon should no longer be relied upon or that PWC could no longer rely on the Company's internal controls or the representations of the Company's management.

PWC further stated, however, that it is not aware of any disagreements between PWC and the Company's management on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of PWC would have caused PWC to make reference to the subject matter of the disagreements in connection with its reports.

Following receipt of PWC's resignation, Fenwick resigned as counsel to the Audit Committee, stating it believed the newly-constituted Audit Committee would be best served by choosing a new law firm to assist the Audit Committee and that Fenwick would provide successor counsel with all of the information gathered to date and otherwise work diligently to ensure a smooth transition.

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