Chinese regulators probe large Covid-related writedowns

Regulators at China’s two biggest stock markets have asked more than 70 companies to explain why they made large provisions for the effects of the pandemic, raising concerns of earnings manipulation.

March 6, 2023 . 2:50 PM

1 min read

Regulators at China’s two biggest stock markets have asked more than 70 companies to explain why they made large provisions for the effects of the pandemic.
The regulatory scrutiny comes as a record 859 listed groups have said in recent weeks that they expect to report big losses in 2022 due to asset write-offs.
Property developers have led the pack in making provisions, even though home sales are starting to recover in many cities.
Industry observers warn the provisions could be subject to manipulation and may distort the real picture.
It is difficult for outsiders, including regulators, to distinguish between normal and 'malicious' asset writedowns because of a lack of information.