Fraud fears keep investors away

One in five companies looking to invest in China and other emerging markets may ditch their plans due to fears of corporate fraud, according to a global survey by Ernst & Young. The survey showed tougher regulations in the US were making firms careful when operating in fast-growing but often loose emerging markets. The Sarbanes-Oxley Act in the US makes publicly listed firms responsible for fraud in overseas operations as well as those that affect domestic business. The survey looked at 586 companies in 18 countries and found 60% of respondents believed emerging-market operations were more likely to be hit by fraud than operations in developed markets.