Does E&Y read The Truth is in the Details? I doubt it, however less than one month after I first raised red flags regarding Zungui in my post here and here, E&Y has suspended the audit of the Company’s financial statements for the year ended June 30th 2011.
Shares of Zungui finished down 77% on the day after the stock was halted pending a news release.
“Ernst & Young LLP ("EY") has advised the Audit Committee of the Company's Board of Directors that it has suspended procedures with respect to the audit of the Company's financial statements for the year ended June 30, 2011 until the Company clarifies and substantiates its position with respect to issues pertaining to the current and prior year which EY has identified in the course of EY's audit work. EY recommended that the issues identified be addressed by an independent investigation.”
For now we will wait on the results of the independent investigation but if Sino-Forest is any indication we may be waiting a while.
Graham
