Walter Hutchens’ Blog

Barron’s reports that a US research firm has cast a skeptical eye on some corporate governance issues concerning recent Chinese listings in the US. One of the stocks mentioned is Giant Interactive, an online gaming company I blogged about at the time of its IPO last year.

Actually, what is most striking to me is that these companies chose to list in the US at all, subjecting themselves to our disclosure laws and the threat of shareholder lawsuits, rather than steering clear of US exchanges as so many foreign issuers have in this post-SOX world. Most of the largest IPOs out of China recently have been Hong Kong listings without a US tranche, unlike some of the earlier waves of PRC companies accessing foreign capital markets. As the Barron’s piece notes, the outfit offering this critique got its information from the public filings of these firms.

Shareholder governance is important, but did investors buy these stocks because they expected it would be good? Or because they thought China’s growth prospects made the risks acceptable?

Bloomberg reports here that Apple has failed to get China Mobile—mainland China’s largest mobile phone network service provider, by far—to sign up for a deal like the one Apple struck with AT&T—a deal whereby 1) Apple gives a carrier exclusive rights to sell the iPhone for a period of time in a given country 2) in exchange for a cut of the revenues the carrier earns from customers using those iPhones.

I own a few shares of both Apple and China Mobile, so it would be good for my personal finances if Steve Jobs were to announce in his Macworld keynote (schedule for this Tuesday) that CHL and AAPL have reached a deal. But that ain’t happening.

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