Firm suspensions increase 40 percent

Finance | Aiden He 20 Oct 2021

A total of 112 listed firms have been suspended from trading for more than three months as of August 31, up 40 percent year-on-year, according to Grant Thornton Hong Kong.

Half of the cases were triggered by auditors, and most of the suspended firms have a market capitalization below HK$1 billion, said Barry Tong, the advisory partner at Grant Thornton Hong Kong. He said that biggest concern for auditors was companies overestimating the value of assets such as accounts receivable, while the number of firms that had changed their auditors rose 27 percentage points to 42 percent, while 11 percent of the listed firms have not yet appointed replacement auditors.

Despite this, Tong said that it is difficult to predict whether the number of delisted firms will also increase because these firms can handle the suspension by applying for an extension or appealing the decision.

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