Beijing-based education company GSX Techedu Inc. said it is being investigated by the Securities and Exchange Commission, the latest case as U.S.-listed Chinese companies face greater scrutiny on accounting issues amid rising tensions between the two countries.
The SEC’s Division of Enforcement contacted the company asking it to produce financial and operating records dating from Jan. 1, 2017, GSX said in its second-quarter earnings statement Wednesday. GSX said it is cooperating with the SEC.
GSX said its audit committee already engaged third-party advisers to conduct an internal investigation into allegations about its finances made by short-sellers including Muddy Waters and Citron Research earlier this year. Shares of the company fell 12% in U.S. trading, the most in almost a month.
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