HK watchdog says Moody's misled public

Hong Kong

MOODY'S Investors Service misled the public and violated a code of conduct when it disseminated a report about Chinese companies in 2011, Hong Kong's financial regulator said.

The report titled "Red Flags for Emerging-Market Companies: a Focus on China," was a primer on possible credit rating reviews, Moody's lawyer Adrian Huggins said at a tribunal hearing in Hong Kong on Thursday. The document shouldn't be considered part of licensed activity as it's not an actual rating review, Mr Huggins said. The July 2011 report had looked at 61 companies, highlighting concerns over weak corporate governance, opaque business models, and unclear financial reporting. The report breached provisions under the code of conduct, according to the Securities and Futures Commission. Bloomberg