June 22, 2006
Bank of China - "Costs of Sarbox are too high"
The upcoming IPO of the Bank of China is a big event in the investment world. Just today, the Chairman of the bank is quoted in Forbes (click here) as saying that "There would be no legal problems for a listing in the US, but I believe the Sarbanes-Oxley law actually adds unnecessary costs for listed companies."
Can't you just hear the Chicken Littles on Wall Street, "The sky is falling! Our fees are falling!".
They have short memories. It was only four years ago that a compliance black hole at the Bank of China was revealed to the tune of at least $500 million. Regulators in Hong Kong and China were unable to detect for a decade a "skimming and money laundering" scheme with international connections. Click here to read more.
One can only speculate about the soundness of the Bank of China's internal controls as of today. (Note: Speculating when it comes to a bank's control system can't be a good thing) You would think that a large bank would be up to the challenge and would want to meet the highest standards.
In any event, we can be assured that because they will not come under the same level of compliance scrutiny and transparency as required by SOX that the potential for weaker controls and higher risks has increased. Investors will not be as well protected. Caveat emptor.
If your company is required to meet SOX compliance standard, please go to www.issuescentral.com to learn more about the Compliance Playbook(TM). If you are a Canadian-based SOX or MI 52-109 filer, please visit our Canadian distributor, Thomson-Carswell's website, www.compliancepartner.ca , to learn more about Compliance Partner(TM).
Can't you just hear the Chicken Littles on Wall Street, "The sky is falling! Our fees are falling!".
They have short memories. It was only four years ago that a compliance black hole at the Bank of China was revealed to the tune of at least $500 million. Regulators in Hong Kong and China were unable to detect for a decade a "skimming and money laundering" scheme with international connections. Click here to read more.
One can only speculate about the soundness of the Bank of China's internal controls as of today. (Note: Speculating when it comes to a bank's control system can't be a good thing) You would think that a large bank would be up to the challenge and would want to meet the highest standards.
In any event, we can be assured that because they will not come under the same level of compliance scrutiny and transparency as required by SOX that the potential for weaker controls and higher risks has increased. Investors will not be as well protected. Caveat emptor.
If your company is required to meet SOX compliance standard, please go to www.issuescentral.com to learn more about the Compliance Playbook(TM). If you are a Canadian-based SOX or MI 52-109 filer, please visit our Canadian distributor, Thomson-Carswell's website, www.compliancepartner.ca , to learn more about Compliance Partner(TM).
