Canadian stock analyst Kun Huang has been locked in a Luoyang, China,
jail for more than a year, charged with defaming a Canadian company
whose shares trade on the New York and Toronto exchanges. In 2011, a
report circulated by Huang's hedge-fund employer alleged that ore
samples from a mine run by Silvercorp Metals
tested low for silver content.
The researcher is one of hundreds that Chinese media say have been rounded up since May 2012 for helping foreign investors check out U.S.-listed Chinese companies, or for conducting the due diligence
required of multinational corporations by their home countries'
antibribery laws.
Chinese television recently broadcast the handcuffed image of well-known fraud investigator Peter Humphrey, a Brit accused with his American
wife of accessing state records in the course of background checks
performed by their Shanghai-based firm, ChinaWhys, on dozens of Chinese
businesses -- including Silvercorp (ticker: SVM).
Investigators like Huang and Humphrey helped expose unflattering
evidence on companies listed here via the back-door maneuver known as a
"reverse takeover" -- inspiring a wave of short-selling, delistings, and
fraud charges by U.S. regulators.
Source:
http://online.barrons.com/article/SB50001424053111903533504579095270615168980.html