Latest Update: The Overworked Auditor Excuse from China Harmony Auto (HKEX: 3836) – November 16, 2020

We just released an update on China Harmony Auto Holding Limited (HKEX: 3836) (“Harmony” or the “Company”). On November 12, 2020 we published our Report on Harmony which highlighted evidence that Chairman Feng defrauded investors and fabricated Harmony’s financial statements. The next day Harmony responded (“Harmony’s Response”) with one of the most laughable rationales for auditor turnover we have ever heard.

Harmony claimed that it needed to divide the labor amongst more audit firms because Harmony’s growth was too much for one auditor to handle. Harmony needed a third auditor because it overworked its two other auditors, Ernst & Young and Zhonghui Anda CPA Limited. To think that a Big 4 auditor cannot handle additional audit work beyond its primary audit responsibilities is ridiculous. Especially when Harmony had zero business combinations in either 2018 or 2019 and only spent RMB 154 million on acquisitions so far in 2020.

Harmony’s Response failed to address any of the evidence presented in our Report. Harmony failed to consolidate operating expenses for its primary subsidiaries and failed to write down failed investments.

We remain short Harmony and believe its stock is worthless.

November 15, 2020 - UPDATE - The Overworked Auditor Excuse from China Harmony Auto (HKEX: 3836) November 13, 2020 - Open Letter to Deloitte Re: China Harmony Auto (3836 HK) November 12, 2020 - Short China Harmony Auto (HKEX: 3836) November 15, 2020 - 博力达思研究_更新_和谐汽车的劳累过度审计核数师藉口(香港交易所3836) November 13, 2020 - 致德勤关于中国和谐汽车的公开信 (香港交易所3836) November 12, 2020 - 博力达思研究_沽空_和谐汽车(香港交易所3836)

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Update Out Now: The Overworked Auditor Excuse from China Harmony Auto (HKEX3836). One of the most laughable response excuses we have ever heard. Claimed growth was too much work for Ernst & Young to handle. Update at http://www.bonitasresearch.com

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