China Deals Meet Growing Scrutiny as Suntech Spurs Questions

Suntech Power Holdings Co.’s admission that it may have failed to verify the existence of German bonds it accepted as loan collateral adds to growing concerns about Chinese business practices that are sparking a wave of lawsuits and regulatory probes.

It’s the third time in a week that internal controls at Chinese companies have been found lacking. The U.S. Securities and Exchange Commission froze assets of traders it accused of insider trading ahead of Cnooc Ltd.’s $15.1 billion deal to acquire Nexen Inc. And fund manager Peter Siris and his Guerrilla Capital Management agreed yesterday to pay more than $1.1 million to settle SEC allegations of “wide-ranging misconduct” related to a Chinese reverse-merger firm.