In 2012, China Medical declared bankruptcy. Since then, the business has been the subject of multiple lawsuits in various nations, and the American government has issued a list of wanted persons for several of its top executives. The liquidation claims that KPMG missed $400 million in fraudulent reporting by China Medical because the audit was of inadequate quality and did not uncover errors by asking “obvious” questions.
The case specifically refers to a $176 million purchase of a diagnostic company when the actual worth was only $155,000. Additionally, China Medical raised $426 million from international investors just before it was liquidated.
KPMG is now being requested to pay $830 million in compensation, of which $454 million is restitution for monies that were wrongfully used and dividends that were paid during the flawed audit, and the remaining $376 million is interest on that sum. All of the accusations are refuted by KPMG, which claims China Medical gave it inaccurate data.
source: ft.com
