July 4, 2011 / 9:28 AM / 8 years ago

UPDATE 1-China listings in U.S. could slow on accounting scandals -PwC partner

* Investor jitters due partly to unfamiliarity with Chinese firms

* Chinese firms can look beyond the United States to list

* China unlikely to launch international board this year (Adds background, more comment)

SHANGHAI, July 4 (Reuters) - The negative sentiment towards some North America-listed Chinese companies triggered by recent accounting scandals will probably slow the momentum of Chinese firms’ IPOs in the United States, a partner at accounting firm PricewaterhouseCoopers China operations said on Monday.

“The current negative public opinion on Chinese companies in overseas markets, especially in the United States, will definitely affect Chinese companies seeking a listing in those markets,” Jean Sun, assurance partner with PwC in Beijing, told reporters.

“Investors are now less willing to dip into their pockets (for Chinese companies), so it’s understandable that the listing momentum will slow,” said Sun.

The string of accounting problems and stock plunges at publicly traded Chinese companies have sparked deep concerns across the world’s biggest audit firms, putting the so-called Big Four on alert from worries that their reputation could be brought down along with a growing list of stricken companies.

PwC has always subjected itself to the accounting profession’s high standards in handling IPO issues, said Sun.

“PwC has always been very prudent,” she said.

Investor jitters over Chinese companies were due partly to foreign investors’ unfamiliarity with the operations of Chinese companies, said Edmond Chan, another PwC partner based in Hong Kong.

“China has experienced fast growth over the past few years. Some companies probably were not ready in certain aspects when they went listing. These are problems that we will have to deal with as the market develops,” Chan told the same news conference.

Chinese companies can look to other markets, such as Hong Kong, which are more familiar with Chinese companies, for listings, he added.

On a separate issue, Frank Lyn, China Markets Leader of PwC, said that due to complex regulatory and currency issues, China is unlikely to launch the long-awaited international board this year.

“The possibility of a launch this year is not big. We need to be patient,” said Lyn.

A major concern for foreign companies hoping to list on the mainland is whether the proceeds from an international board listing can be used for their businesses outside mainland China.

Shang Fulin, chairman of the China Securities Regulatory Commission, told a financial forum in Shanghai last month that the international board, which will allow multinationals such as HSBC and Coca-Cola Co to sell shares to mainland investors, was “getting closer and closer to us.”

But the recent volatile market conditions, which had led to a record number of IPOs being pulled in Asia, had prompted talk that the government had put the plan to launch the international board on the back burner.

China’s IPO market slowed by a fifth in the first half of 2011 amid a lack of mega deals that hit the market the year before, with fundraisings dominated by small businesses.

Reporting by Soo Ai Peng; Editing by Jacqueline Wong

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