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China: SEC makes latest crackdown on ‘backdoor merger’ co

By  |  May 15, 2013
China: SEC makes latest crackdown on ‘backdoor merger’ co

The husband and wife team running a China-based company has reportedly settled with the US Securities and Exchange Commission, which initiated allegations against the pair that they manipulated revenue reports. The pair, which ran RINO International Corp., are head of what is called a “reverse merger” company, a term used to describe the practice of merging with a US-based company to enter the US market from abroad. The companies are facing growing scrutiny from the SEC for accounting irregularities as the companies list themselves as US-based, but are in fact Chinese. The SEC accused the two owners of diverting $3.5 million in funds and using it for personal reasons.

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    Full Content: Reuters

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