Fitch: Hua Han Health on watch

Fitch Ratings said it placed Hua Han Health Industry Holdings Ltd.'s long-term foreign-currency issuer default rating of BB- on Rating Watch negative, along with its senior unsecured rating of BB- and the BB- rating on its $150 million senior notes due 2019.

This follows the delay in Hua Han's response to allegations that it had inflated its revenue and cash balance, which raises uncertainties over the robustness of the company's corporate governance and internal controls, Fitch said.

On Aug. 11, Hua Han halted trading in its shares listed on the Hong Kong stock exchange pending the release of a clarification regarding the negative report from Emerson Analytics Co. Ltd., the agency explained.

There have been no further announcements from Hua Han about Emerson's key allegations that Hua Han inflated its revenue by three times, made questionable transactions and overstated its net tangible assets by HK$2.8 billion versus Emerson's assessed value of HK$1.73 billion, Fitch said.

Until the company successfully refutes these allegations, Fitch said it is unable to determine the robustness of Hua Han's internal controls and corporate governance.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.