JPMorgan Checks Fine Print as Kaisa Default Alerts S&P on China

Investors are scrutinizing Chinese developers’ books after Kaisa Group Holdings Ltd.’s default, as rating companies highlight accounting red flags.

A doubling of Kaisa’s debt only came to light after a potential buyer reviewed its accounts and customers sought refunds on deposits for buying properties without presale clearance. Advance payments, bookkeeping for joint ventures and perpetual bonds are among areas needing attention to assess risks, Standard & Poor’s and Moody’s Investors Service said.