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By Adam Skuse The saga of accounting scandals among US-listed Chinese firms took a major turn last week that could see investor confidence in such companies dip further, and has given more impetus to talks scheduled next month between the US and China regarding oversight of auditing firms on the Chinese mainland. The Shanghai office of accounting firm Deloitte was hit with a subpoena enforcement action on September 8 by the US Securities and Exchange Commission (SEC), ordering the former to produce documents related to the SEC investigation into possible fraud by the accounting firm former client, software firm Longtop...

NEWS 2020

By Adam Skuse China has for the first time officially endorsed London as a center for the offshore trading of the renminbi, as part of the country's drive to internationalize its currency. The Chinese and British governments said in a joint statement that they elcomed the private sector interest in developing the offshore [renminbi] market in London and the growth of the market to date." Both sides agreed to support the market future development. The announcement came after Chinese Vice Premier Li Keqiang met with UK chancellor George Osborne at a summit in London to discuss economic ties between the two...

NEWS 2020

By Adam Skuse The US securities regulator has urged American companies to increase the information they provide on their offshore cash holdings, amid concerns that companies are not repatriating cash so as to avoid paying US taxes. The US Securities and Exchange Commission (SEC) asked companies that included Dow Chemical, Fortune Brands, Caterpillar and CIT to increase disclosure to shareholders in order to give a clearer picture of company liquidity, the Financial Times reported on September 19. It was prompted to do so over claims that corporate decision making is being distorted by the way taxes on overseas income is levied....

NEWS 2020

By Adam Skuse Of the world's biggest 100 companies, 80 have holding companies based in the Netherlands, although none of these are Chinese, according to a recent investigation by a Dutch financial paper. The report by Financieele Dagblad, part of a series on the use of the Netherlands as a conduit for taxes, said that of the 20 biggest oil companies in the world, only the Chinese State-owned giants Sinopec and China National Petroleum are not involved in the Netherlands. However, the Chinese presence in the Netherlands is growing. About 30 Chinese companies will open branches or European headquarters in the...

NEWS 2020

By Adam Skuse The US state of Nevada has set itself up as an offshore center specializing in shell companies that allow foreign firms to make backdoor listings on US stock exchanges. Of 1,215 publicly-traded US shell companies monitored by financial consulting firm PrivateRaise, 588 are registered in Nevada, according to a recent Reuters report. Nevada has the second-largest number of corporate entities registered per capita, after Delaware. Its business-filings unit generated revenue of $108 million in fiscal 2010, up from $43 million in 2002. A recent spate of accounting scandals involving US-listed Chinese companies prompted the US to call for...

NEWS 2020

By Adam Skuse Offshore jurisdictions have recovered from the damage suffered to their reputations over the past three years, with investors recognizing the contribution they make to the international financial system, according to a new report ranking global financial centers. In the 10th bi-annual Global Financial Centres Index compiled by London-based consultancy Z/Yen Group and released on September 26, offshore centers have seen considerable gains in their ratings among the 75 financial centers that were assessed in the report. Financial centers were scored according to a number of indexes as well as surveys of finance professionals. The top center London...

NEWS 2020

Leo Zhang The Cayman Islands and China have signed a landmark tax information exchange agreement as part of efforts to boost ties between the two countries and reflecting China stepped-up efforts to combat capital flight. It was the 26th agreement for exchange of information with regard to tax purposes for the Cayman Islands, which is on the way to reach more similar deals with the globe most powerful nations. McKeeva Bush, the Cayman Islands' Premier, co-signed the TIEA with Song Lan, Deputy Commissioner and Vice Minister of China State Administration of Taxation at a ceremony on September 26. The agreement will...

NEWS 2020

By John P. Egan Hong Kong, the world third largest gold trading centre, has become the first region outside of mainland China to offer RMB denominated gold spot contracts, reinforcing its position as the premier offshore hub for the yuan. In times of economic uncertainty gold is habitually used as a means of light to safety the recent explosion in demand for the precious metal has been largely in response to global economic turmoil resulting from the financial crisis of 2008. Not only does it offer speculative opportunities, it also provides a hedge against inflation, deflation and currency devaluation. China...

NEWS 2020