New Oriental shares plummet on news of SEC investigation

New Oriental Education & Technology Group (EDU.NYSE), China’s largest provider of education services, saw its shares suffer the biggest decline since the company’s IPO in 2006 following an announcement that the Securities and Exchange Commission is investigating the firm, Bloomberg reported. New Oriental’s American depositary receipts fell 27% to US$16.22. The news also led to a fall in the Bloomberg China-US Equity Index of the most-traded Chinese stocks in the US.  According to a statement from New Oriental, the SEC is investigating “whether there is a sufficient basis for the consolidation of Beijing New Oriental Education & Technology (Group) Co, a variable interest entity of the company’s consolidated financial statements.” The SEC may also audit the consolidated earnings of the company’s subsidiaries, New Oriental said.