Chinese Stocks, Do You Know The Risks?

In this episode, 小翠 talks about Kangmei Pharmaceutical Co, a case of fraud that was initially punished with just a slap on the wrist. Well, the Emperor decided to change the rules and reopened the case.

Independent directors of Chinese listed companies are often college professors who have nothing better to do. They are made to sign a deed accepting responsibility if the company’s management were found guilty of lapses or infringements. A fine of a few hundred million RMB will bankrupt any of these “independent directors”. The recent ruling against Kangmei heralded a wave of resignations of independent directors from various Chinese companies. The writing is on the wall. Avoid these stocks like you would the plague.