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Big China Short Shows Downside of Kleptocracy

Even by the wacky standards of Chinese accounting scandals, this week’s events at China’s second-biggest maker of construction equipment, Zoomlion Heavy Industry Science & Technology Co., were awfully strange.

It all started when a Hong Kong-based news outlet, Ming Pao Daily, published an article about an anonymously written letter it had received that accused Changsha-based Zoomlion of falsely inflating its sales. At most news organizations, an unsigned letter accusing people of fraud wouldn’t spawn a major news article. But this one did on Jan. 8. Ming Pao said the letter was sent to Hong Kong securities regulators, too, although it isn’t clear whether they plan to do anything.