SAN FRANCISCO (Thomson Financial) - American Dairy Inc. late Tuesday said it
has dismissed its independent public accounting firm, Murrell, Hall, McIntosh &
Co., effective immediately.
The company also said the Securities and Exchange Commission has opened an
informal investigation into individuals and entities that provided accounting or
advisory services to American Dairy, including MHM and Henny Wee & Co.
American Dairy said it believes the primary focus of the SEC's investigation
is related to the independence of MHM and Henry Wee, rather than to the
company's business operations or management. The company said it's fully
cooperating with the SEC and actively evaluating a new accounting firm.
Additionally, American Dairy said it expects the new accounting firm will
conduct an audit of the company's financial results for the fiscal years 2004
through 2007 as a result of the SEC's probe. The new firm is also expected to
perform procedures on selected financial information for the years 2002 and
2003, the company said.
The company said it may have to restate historical financial results,
although it doesn't currently expect it will be necessary.
"The appearance or perception of a lack of independence at our auditors is
unacceptable to us, so we accelerated the process of working with a new
auditor," said American Dairy Chief Executive Leng You Bin in a statement.
Shares of the San Marino, Calif.-based company, which manufactures and
distributes dairy products through subsidiaries, closed the regular session down
40 cents, or more than 2%, at $18.10.
Katherine Hunt
kh/gm
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