KPMG Preempts China Forestry Audit Trial, Settling Out of Court

KPMG LLP has settled with the liquidators of a collapsed Chinese timber company as it was about to face trial for allegedly shoddy auditing.

Liquidators of China Forestry Holdings Co. had brought a court action against KPMG in Hong Kong, alleging that the accounting firm failed to detect fraud in an audit before the holding company’s 2009 listing on the Hong Kong stock exchange. China Forestry raised 1.68 billion Hong Kong dollars ($216 million) from the listing, but its shares were suspended from trading a year later and it delisted in 2017. ...