RedChip Announces Exit From China Small-Cap Sector
ORLANDO, Fla., Jan. 3, 2013 (GLOBE NEWSWIRE) -- RedChip Companies, Inc. ("RedChip"), an international small-cap research, investor relations, and media company, today announced that it has exited the China small-cap sector and terminated its contracts with its three Chinese clients.
"We made a decision to close our Beijing office months ago and wind down our China operations," stated Dave Gentry, President and CEO of RedChip. "Wall Street has, for the most part, lost confidence in the financial reporting of U.S.-listed Chinese companies. We are concerned that Big Four accounting firms were unable to detect financial fraud in companies like Sino-Forest and Longtop Financial."
Mr. Gentry continued, "When multi-billion dollar funds like Paulson & Co. and The Carlyle Group, with their unlimited resources, are unable to detect fraud in their Chinese-based portfolio companies; when top-tier investment banks like Goldman Sachs are unable to detect fraud in their Chinese-client companies; then I think reasonable investors must take a step back and seriously consider whether the potential rewards outweigh the downside risks of investing in U.S.-listed Chinese companies. We simply are not willing to take the risk."
"If we cannot trust the audit work of firms registered with the Public Company Accounting Oversight Board ("PCAOB"), which is the final line of defense against accounting fraud in Chinese companies listed in the U.S., as has been proven in dozens of cases over the past two years, and the Chinese regulatory authorities are not willing to work with the U.S. Securities and Exchange Commission ("SEC") and the PCAOB in helping uncover fraud and punish wrong-doers, and apparently they are not, then it is time for investors to jettison the China sector," stated Mr. Gentry.
Over 50 Chinese companies have either been delisted or defaulted off the NASDAQ or NYSE over the last 24 months.
Mr. Gentry also added, "Muddy Waters, GeoInvesting and Alfred Little have done a great service to investors in uncovering fraud that the biggest and 'best' accounting firms in several cases did not uncover. We should applaud their work."
About RedChip Companies, Inc.
RedChip Companies, an Inc. 5000 company, is an international small-cap research, investor relations, and media company headquartered in Orlando, Florida; with affiliate offices in San Francisco, Seoul, Hong Kong and Singapore. RedChip delivers concrete, measurable results for its clients through its extensive global network of small-cap institutional and retail investors. RedChip has developed the most comprehensive platform of products and services for small-cap companies, including: RedChip Research™, Traditional Investor Relations, Digital Investor Relations, Institutional and Retail Conferences, "The RedChip Money Report" TV show, Shareholder Intelligence, Social Media and Blogging Services, and Webcasts. To learn more about RedChip's products and services, please visit: http://www.redchip.com/visibility/productsandservices.asp.
"Discovering Tomorrow's Blue Chips Today"™
The RedChip Companies, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2761