The case of China Bio is the most reasonable or we called best practice for current reverse merger case.The auditor request to disclose the risks clearly and the investor will make their decision of investment.
The true story is that the company previously understate the revenue and lower the VAT tax and income tax on purpose. During the period of going public procedures, normally we request the company to restate the Financial statement for public purpose, not rely on the previous tax book. The local tax bureau never get chance to read our audited report so will never request to pay off the tax payables.
winsx2009, you are smart to find out the tricky of Fushi, next time, i shall invite you to meet with the CFO of fushi and ask him that question directly.
SEC is us authority and they just check the compliance with US regulations.
