Artical review Essay Example | Topics and Well Written Essays - 500 words

Artical review - Essay Example The article further considers corruption within this organization, noting that it recently disclosed that it could find its company, or authorized signatures, for its Chinese subsidiary. These seals are necessary for the organization’s subsidiary to undertake any business in China. The article further considers the issue of shares and notes that shareholders did not purchase shares in the organization, but instead a United States company; the confusion arose because the original company incorporated in the United States to avoid Chinese business restrictions. While ChinaCast was the latest such occurrence of corruption, the article notes this is a frequent occurrence in China. Sino-Forest, a Chinese company based in Canada, was perhaps the most prominent such case. Sino-Forest was recently accused, by Muddy Waters Research of fraudulent activities and accounting practices. The subsequent investigation attested to no specific accounting fraud by did demonstrate a variable interest entity was in effect; this is the same situation that occurred with ChinaCast. Other elements of Chinese investment demonstrate that the ownership of assets can only be temporary. Yahoo recently found itself involved in a disagreement with Jack, the chairman of the Alibaba Group, after he used defensive tactics to transfer Alipay to a private company controlled by him. The issue was highly challenging as Yahoo owns a substantial stake in the organization, and his transfer of the company demonstrated that he was willing to go to extremes to ensure that he was the only purchaser of specific assets. Additionally there have been over 105 Chinese companies that have been delisted from the Nasdaq stock exchange. While not all situations are involved in fraud, the article notes that the variable interest entity structure is one of the most prominent challenges for investors. Even Chinese companies that have gained prominence as an American investment outlets have