Are midwifes responsible for S-chips listed here?

With more oversea-listed Chinese companies (S-chips) being rapped for accounting irregularities globally and particularly in Singapore, Mr Max Loh, Ernst and Young's (E&Y) new country managing partner for Singapore, says that the firm is strengthening its client acceptance procedures. It is a set of criteria to decide whether to accept or not to accept a prospective client, particularly on those entities en-route for public listing.

Mr Loh, in my opinion, correctly added that improving Chinese companies' corporate governance does not just fall strictly on the shoulder of accounting and auditing profession.

Thus here are the key questions I am asking for this article. Firstly, who are key expertises ie. midwifes, needed to identify, gestate (ie. packaging) and subsequently get them listed (ie. born) at a particular stock exchange? Secondly, what are their responsibilities for pre- and post-delivery?

Besides the accounting and auditing profession, the other midwifes are lawyers, corporate bankers, capital market specialists, the PR specialists and finally the gatekeeper ie. the security exchange. During the good times of S-chips, there are people going around in China talking and identifying companies for incubation and grooming to be listed. Once both parties agree to work towards listing, the rest of midwifes are brought in to do a makeover ie. make it looks good enough to at least last till the first day of being listed.

Once the entity is listed, most of the midwifes' responsibilities expire except for the exchange and auditor. So when S-chip bubbles imploded across the world's exchanges, the minority shareholders ended up with massive losses. When the minority shareholders look for people who should be held accountable, they were stone-walled with the famous punchline ie. "Buyers beware". In the meantime, the midwifes enjoy their bounty. In recent years' as the S-chips' gravy train has come to standstill, many of these midwifes have shifted their operations to more fertile grounds, geographically or to another trade all together.

Should "Buyers beware" be our first and last line of defence? These midwifes were delivering exactly what the investors were craving for ie. to invest in any company with the word "China" in its name. It is observed that no one from Wall Street has been held responsible and prosecuted till today for financial crisis caused by property meltdown in US.

Perhaps the financial market is a stage where every man and woman plays its part, the outcome is the responsibility of no single person but all participants.