June 27, 2011 / 7:51 PM / 6 years ago

UPDATE 2-A-Power says auditor MSCM resigns; shares halted

* MSCM says co didn’t retain independent accounting firm

* Co says Form 20-F for 2010 to be delayed (Adds background in para 5, details)

June 27 (Reuters) - China’s A-Power Energy Generation Systems Ltd said its independent auditor, MSCM LLP, has resigned as the green power company did not retain an independent forensic accounting firm, as required by the auditor, amid a slew of setbacks for U.S. listed-Chinese firms.

Trading of the company’s shares, which have shed about 71 percent of its value in the last six months, on Nasdaq was halted on Monday at $1.67.

In a letter dated June 26, MSCM wrote that it had resigned as A-Power had not retained a qualified independent forensic accounting firm to evaluate transactions, as required by the auditor, the company said.

The company’s audit committee members will meet with other qualified independent auditing firms.

Earlier this month, the company said a director had resigned on concerns that his views on process and best practices were not “necessarily shared throughout the company”.

A-Power is the latest to admit to auditing problems amid a rash of scandals that have devastated the share prices of U.S.-listed Chinese stocks.

The Shenyang-based company’s annual report on Form 20-F for 2010 will be delayed beyond June 30, its filing date.

The company had postponed filings in the past. In March, it was called to arbitration in a dispute with General Electric’s transportation unit for alleged breach of contract.

A-Power, which provides power generation systems and makes wind turbines, competes with bigger rivals such as German solar cell producer Q-Cells and Spanish windfarm operator Iberdrola in the emerging global clean-power sector. (Reporting by Vaishnavi Bala in Bangalore; Editing by Joyjeet Das and Prem Udayabhanu)

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