SNP China Petroleum and Chemical Corp

DELOITTE

Dutch Affiliate Settles U.S. Case

Accounting firm Deloitte Touche Tohmatsu's affiliate in the Netherlands has agreed to pay $300,000 to settle a U.S. regulator's allegations that it ran afoul of auditor-independence rules, making it the third Deloitte member firm to face sanctions from the regulator in recent days.

The U.S. Public Company Accounting Oversight Board said Deloitte Accountants BV, the international accounting network's member firm in the Netherlands, violated independence rules because the wife of the firm's then-chief executive, Piet Hein Meeter, was on the board of a family trust that included investments in RBS Holdings NV and Reed Elsevier NV when Deloitte was their auditor in 2011-2012.

The Netherlands firm didn't admit or deny any wrongdoing in agreeing to the settlement. A Deloitte Netherlands spokeswoman said the PCAOB's findings "related to facts dating from 2012 and before," and since then the Deloitte Netherlands affiliate "has made substantial improvements to its quality control system in order to provide assurance that the firm is meeting all required independence standards."

Mr. Meeter, who himself didn't face any allegations of wrongdoing in the case, declined to comment. The Deloitte Netherlands spokeswoman said Mr. Meeter "remains a partner of Deloitte in a nonclient service role." He is Deloitte's global leader of legal services.Deloitte's Netherlands affiliate is legally separate from Deloitte's U.S. firm. Deloitte and other major accounting firms are structured as international umbrella networks with free-standing member firms in each country where they do business.

Last week, Deloitte's Brazil and Mexico affiliates also settled with the PCAOB over separate issues. Deloitte Brazil agreed to pay $8 million over allegations that it issued false, deficient audit reports and tried to cover it up. Deloitte Mexico agreed to pay $750,000 over allegations that it hadn't taken the proper steps in documenting its audits. Deloitte Brazil admitted it violated quality-control standards and failed to cooperate with the PCAOB; Deloitte Mexico didn't admit or deny wrongdoing.

--Michael Rapoport

SINOPEC

IPO Plans Revived for Gas-Station Unit

China Petroleum & Chemical Corp. has revived plans for an initial public offering of its gas-station and convenience-store unit, according to people familiar with the matter, a deal that could raise as much as $10 billion.

The state-run oil firm, also known as Sinopec, is in talks with banks about launching a potential IPO of Sinopec Marketing Co. next year, the people said.

A listing in Hong Kong is being considered, though a final decision hasn't been made on the location of the IPO, some of the people added.

A potential listing of the unit -- which is seen as a test case in China's attempts to revamp its lumbering state-owned enterprises -- is one of the options being discussed as part of a broader restructuring, some of the people said.

Sinopec had originally planned to raise between $5 billion and $10 billion through an IPO of the unit in 2015, The Wall Street Journal reported at the time, though the process was delayed following the retirement of Fu Chengyu, the firm's former chairman.

A listing of the unit would raise funds that Sinopec could invest in the stores attached to its gas stations, helping them become more profitable.

A listing in Hong Kong also would bring in more foreign investors that could press for better oversight and higher earnings for the assets, helping Beijing with its broader goal of overhauling bureaucratic, state-run companies.

Sinopec said in September 2014 that it had sold a nearly 30% stake in Sinopec Marketing to 25 investors for 107.1 billion yuan ($15.52 billion). More than half of the investors were incorporated in China, while the rest were incorporated offshore but related to Chinese entities.

Sinopec retained a 70.01% stake in the unit following the deal.

--Alec Macfarlane, P.R. Venkat

(END) Dow Jones Newswires

December 15, 2016 02:47 ET (07:47 GMT)

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