XIN was recommended by Global Investing at $4.10 in Investment Digest issue 665, dated February 17, 2010. Editor Vivian Lewis sold XIN yesterday, writing in part:
“The U.S. SEC has blocked stock accounts in Hong Kong while it is looking into the CNOOC insiders who traded Nexen stock before the takeover was announced last week. The sums involved are astonishing. CNOOC is a state company.
"[In addition,] while the U.S. short-sellers like Muddy Waters are sometimes wrong, their ability to search into Chinese tax records to find discrepancies is now being blocked in China. China is protecting its company secrets out of nationalism but the risk is that there are scandals being hidden.
“The corruption may not affect every single one of our Chinese small caps, but there is no way to be sure as even listed companies with Big Four auditors have been shown to use fraudulent accounts. CNOOC is a Red Chip. ...
“While our reporters or your editor have talked to the top officials of all of the companies we recommended, we are not forensic accountants or fraud experts. We therefore are selling [XIN.] I am not risking another fraud.”
- Vivian Lewis, Global Investing, July 30, 2012