CRMs, affect the American marketplace. CRMs have become an issue for American investors because of the lack of oversight from both the United States and China. The premise of a CRM is that a Chinese shell company acquires a publicly listed American company in order to enter the US market. Because the headquarters is based in China, US auditors are not allowed to audit them, "United States regulators are not permitted access by Chinese authorities to oversee the companies" The companies also aren't subject to Chinese regulation since they aren't publicly traded in China.
One of these companies, Longtop Financial, was a highly profitable company that was respected because Deloitte was the auditor. After seven years, Deloitte began to question the assets of the company. Soon after, Deloitte resigned as the auditor and the rest of the company unraveled. Soon afterwards, the Cheif Financial Officer's resigned and the SEC halted trading. Obviously, this wasn't such a huge company that it shook the entire market, but it is only one of several examples of CRMs where American investors are being taken advantage of by an extreme lack of regulation in a political gray area.
Question
What might have been the potential fraud scheme? Which assets are in questions?