Chinese insurer says will cooperate with US' inquiry

  • Business
  • Wednesday, 28 Apr 2004

SHANGHAI, China (AP) - China Life Insurance has received notice of an informal inquiry by U.S. stock regulators and plans to "cooperate fully,'' the company said in a statement received Wednesday. 

China Life, the country's largest insurer, has shares traded in New York and Hong Kong. 

It said that on Monday, its legal counsel received a notice from the U.S. Securities and Exchange Commission requesting it provide "documents and other relevant information on certain matters.'' 

"The company intends to cooperate fully with the inquiry,'' it said. 

China Life said the SEC had advised it that the informal inquiry did not imply any violation of laws or any "reflection upon any person, entity or security.'' 

China Life is facing a class-action lawsuit in the United States alleging "massive financial fraud'' related to the disclosure in February by the National Audit Office of alleged accounting irregularities at its mainland-China based parent company, China Life Group. 

China Life Group was ordered to pay more than US$8 million in fines and unpaid taxes for the alleged illegal practices, which auditors said involved 5.4 billion yuan (US$653.7 million). 

The insurer says the irregularities occurred at the parent company before China Life was restructured for its US$3.4 million overseas share listings in December.  

The U.S.-based investors contend that China Life should have disclosed that information before the company's shares were listed. - AP 

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