1 in 10 reverse mergers of Chinese firms on US stock exchanges "fraudulent"
March 17, 2011 - At least 10% of Chinese companies that have gone public on stock exchanges in the United States are engaged in fraud. The deals often involve establishing offshore holding companies in the British Virgin Islands, Cayman Islands, Samoa or another offshore jurisdiction in order to conceal illegal conduct. The startling claim, following extensive research, was made to OffshoreAlert by Sharesleuth.com, an investigative news web-site.
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Although the companies are listed on U.S. markets, their business operations are in China and their holding companies are in a third country, creating a maze of regulatory and jurisdictional conflicts that make it difficult for American authorities to pursue investigations abroad."
These are the places that are supposed to be co-operative, transparent and well-regulated.