China Valve Tech (CVVT) Going the Way of RINO (RINO); to the Pink Sheets
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Shares of China Valve Technology (NASDAQ: CVVT) dropped 18 percent to $7.15 into the close on Thursday after an article from Citron Research said that the company may be the next victim of the increased scrutiny surrounding the China RTO small cap space.
"Frazer Frost has become the poster child for bad auditing of Chinese names," Citron said. "They were just sanctioned by the SEC for their lack of oversight of China Energy. Frazer was also the auditor for the now infamous, recently delisted RINO. All of Frazer’s clients have been forced to find new auditors, which for the reasons described below, puts CVVT in an untenable position."
Citron noted that CVVT ranked 63 out of 70 companies ranked in the Piper Jaffray China investment study, giving the company one of the lowest governance scores.
The article also points out that the company has a revolving door of CFOs and that it has made three acquisitions in the last two years with some of the "most unimaginably bizarre" disclosures seen.
"Citron further predicts the company will get delisted to the world of the pink sheets when it inevitably fails to produce a credible audit of its 2010 acquisitions."
"Frazer Frost has become the poster child for bad auditing of Chinese names," Citron said. "They were just sanctioned by the SEC for their lack of oversight of China Energy. Frazer was also the auditor for the now infamous, recently delisted RINO. All of Frazer’s clients have been forced to find new auditors, which for the reasons described below, puts CVVT in an untenable position."
Citron noted that CVVT ranked 63 out of 70 companies ranked in the Piper Jaffray China investment study, giving the company one of the lowest governance scores.
The article also points out that the company has a revolving door of CFOs and that it has made three acquisitions in the last two years with some of the "most unimaginably bizarre" disclosures seen.
"Citron further predicts the company will get delisted to the world of the pink sheets when it inevitably fails to produce a credible audit of its 2010 acquisitions."
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