Sky China Shares Slump Following Auditor's Resignation

Ernst & Young has resigned as auditor of Singapore-listed Sky China Petroleum Services, resulting in a slump in the shares of the latter to as much as 32 percent to a record low, reports a Reuters article published by the South China Morning Post.

 

The resignation was triggered after the resignation of E&Y's China arm as auditors of Nasdaq-listed SinoTech Energy, says Reuters.

 

Sky China's chief executive, Liu Qingzeng, is also the chairman of the board of SinoTech.

 

The resignation of SinoTech's CFO and E&Y's China arm came after a short-seller of SinoTech's stock, alfredlittle.com, made allegations about the company's business and the accuracy of its financial statements.

 

Sky China said its audit committee was unaware of any further reason for the resignation.

 

"The resignation of the auditors doesn't bode well. They will have a lot of explaining to do and the market is taking a cautious stance. It's up to the company to prove its innocence," Roger Tan of SIAS Research told Reuters.

 

 

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