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Pre-IPO Accounting Audit for a Joint Venture Between an Energy Company and SOE
In order to prepare their client's JV partner for listing in Hong Kong or Singapore, HGR Consulting had to conduct a pre-IPO listing audit on the Joint Venture's books.
Client:
A Foreign Public Energy Company
Action:
HGR Consulting conducted a complete audit of the Chinese company, which included going back through years of poor accounting practices, a common issue in China. Not only were the financial statements and accounts incomplete, but there was also evidence of falsified financial transactions. Our team traced mistakes back over the years to resolve each problem. We applied Generally Accepted Accounting Principles (GAAP) to the general ledger accounts and reconstructed the accounts to comply with IFRS rules. This audit and reconciliation enabled the JV company to proceed with its preparations for an IPO.
Task/Facts:
The client, with rights to thermal energy technology, wanted to enter the China market. Since the government only allows companies with local interests to sell, a joint venture is required. The client started concessions with a Chinese State-Owned Enterprise (SOE) in the Oil & Gas Industry. To facilitate this partnership and ultimately list the company either on the Hong Kong or Singapore stock exchange, the SOE financial records need to be transparent and comply with Generally Accepted Accounting Principles (GAAP).
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