AutoChina being probed by SEC

AutoChina International (AUTC.NASDAQ), a company that sells and leases commercial vehicles, said it will restate financial statements from 2009 onwards in relation to an investigation by the US Securities and Exchange Commission (SEC) into its accounting methods, Reuters reported. The announcement comes amid a raft of accounting scandals and de-listings that have increased scrutiny of Chinese companies trading on North American exchanges, especially those that have listed through reverse mergers, like AutoChina. The SEC probe is directed at a derivative liability relating to an earn-out share provision, which was part of AutoChina’s initial business combination in 2009. The car company revealed it had identified a material weakness in its internal control while preparing its year-end financial reports for 2010, but added that neither the SEC nor any other party has accused AutoChina of breaking any laws. The company’s shares closed at US$29.19 on Thursday. Short interest accounted for more than 85% of AutoChina’s public float on June 17, according to research by Data Explorers.