SinoTech

SinoTech: Problems continue to suffice for Co. plagued with accounting fraud, with its special auditors issuing a ‘Report of Independent Review’.

In the Report, KPMG stated that they were not given access to five of the six computers used by Co’s and its subsidiaries’ employees in order for them to perform their forensic tech procedures, and that the Local Tax Bureau refused to accede to Co’s request for copies or a summary listing of the Company’s China subsidiaries’ sales and purchase invoices.

As a result, KPMG was not able to complete their entire scope of engagement. This means that the discrepancies highlighted by Co’s auditors, Ernst & Young LLP, which the Company has announced on 14 April 2011, remain unresolved. In light of this, the Audit Committee has decided, as a preliminary step, to recommend the appointment of a firm of valuers, to carrying out a valuation of the Co’s assets and liabilities to ascertain what is, in the opinion of the valuer, the current value of the Company.

The Audit Committee also hopes that a valuation may help reconstruct the Company’s accounts which were lost in the fire. The Audit Committee will also seek professional advice on a further course of action and will keep shareholders informed of any material developments.