DELOITTE is seeking a federal court order to reject a request by the US securities regulator to reopen a case that forced the firm to hand over documents it was auditing of an allegedly fraudulent Chinese company.
The US-based auditing firm is asking that the case be postponed pending the outcome of a December action taken by the US Securities and Exchange Commission against it and four other audit firms on similar charges, according to legal papers acquired by Reuters.
Deloitte's move was the latest between auditing firms and the SEC over access to audit documents of Chinese companies listed in the US. China maintains that providing them to US regulators would violate Chinese sovereignty and its secrecy laws.
Deloitte also argued that the SEC was partly responsible for the situation, the papers said.
"The SEC has long been aware that the CSRC (China Securities Regulatory Commission) forbids China-based audit firms to produce audit work papers directly to the SEC, and yet the SEC chose to allow China-based companies to sell securities in the United States despite those restrictions," Deloitte wrote.
The SEC first filed the case against Deloitte in May 2011 over the audit documents of Longtop Financial Technologies Ltd, a former client of Deloitte, which was delisted from the New York Stock Exchange in 2011 for failing to meet listing standards.
The case was suspended in July as the SEC tried to seek a "diplomatic solution" with Chinese authorities. It was reopened in December after the efforts failed.
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