Trading of China Medical Technologies Inc. (CMEDY) (CMEDY)’s American depositary receipts was suspended by the U.S. Securities and Exchange Commission, which cited questions on the accuracy of the company’s information.

The regulator ordered a temporary suspension in the Beijing-based medical device company’s shares, starting today and ending on July 13, according to a statement on the SEC’s website today. The action was caused by “questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the status of the company’s officers and directors, the accuracy of the company’s financial statements and filings with the Commission,” the SEC said.

The SEC enforcement action “further reiterates concern investors have expressed regarding financial reporting and corporate governance at Chinese companies over the past two years,” Kevin Barnes, an equity analyst at Absaroka Capital Management LLC, said by phone today.

Hong Kong-based Sino-Forest Corp. was delisted from the Toronto exchange in May after the company filed for bankruptcy in March. Short-selling firm Muddy Waters LLC first accused the tree plantation operator of misstating business and assets in June of 2011. The company, one of more than 300 Chinese companies listed in North America, lost C$3.3 billion ($3.2 billion) of market value after the report was released and hasn’t traded since August.

Winding-Up Petition

Bondholders of China Medical, which is registered in the Cayman Islands, directed the Wilmington Trust Co. to file a so- called winding-up petition on June 15 with the Grand Court of the Cayman Islands to liquidate the company after it defaulted on interest payment on two notes from December.

The company issued $150 million of 6.25 percent six-year convertible bonds in December 2010 and $276 million of 4 percent five-year convertible bonds in August 2008.

China Medical said it intended to implement a debt restructuring plan to improve its balance sheet, according to a Dec. 14 regulatory filing (CMED). The company hasn’t released any public statements since then.

The Nasdaq stock exchange said March 14 it was delisting China Medical after its ADRs stopped trading on the exchange from Feb. 24. The company raised $96 million in an initial public offering in August 2005 by selling 6.4 million ADRs at $15 each.

The ADRs, surging to this year’s high of $12 on June 27, sank 10 percent yesterday to $10.78 on the U.S. over-the-counter market. They tumbled to a record low of $1.35 on Feb. 29.

To read more on this story go to:

http://www.businessweek.com/news/2012-06-29/sec-suspends-trade-in-china-medical-adrs-on-information-accuracy