Hong Kong court rejects EY's case that China law protects mainland audit papers

HONG KONG Fri May 23, 2014 3:20am EDT

HONG KONG May 23 (Reuters) - A Hong Kong court on Friday rejected auditor EY's contention that Chinese law prohibits the mainland partner of the firm previously known as Ernst & Young from passing on documents related to a former China client.

The ruling, the first of its kind in Hong Kong, comes as international regulators continue to press the case for access to documents regarding mainland Chinese companies as part of ongoing investigations.

Hong Kong's Securities and Futures Commission brought the case to court in 2012, seeking access to documents related to EY's unfinished audit of Standard Water, a Chinese municipal water services provider that scrapped plans for a 2010 initial stock sale in Hong Kong.

EY has said it didn't have the relevant records, which were held in mainland China by its joint venture partner, Ernst & Young Hua Ming, and could not be produced due to Chinese state secrecy laws. (Reporting by Nikki Sun and Clare Baldwin; Editing by Kenneth Maxwell)