Jan 5 (Reuters) - A federal judge on Thursday ordered
a Chinese unit of Deloitte & Touche to appear in court and
defend itself against efforts by U.S. regulators to obtain
documents related to possible accounting fraud.
Deborah Robinson, a magistrate judge in Washington, ordered
Deloitte to appear in court on Feb. 1 and explain why the court
should not force it to turn documents over to the U.S.
Securities and Exchange Commission.
The SEC put that request to the court in September, after
Deloitte failed to respond to a subpoena seeking information
about its Chinese unit's audits of Longtop Financial
Technologies Ltd, a Chinese company under
investigation by the SEC.
Dozens of China-based companies have disclosed auditor
resignations and book-keeping irregularities in the past year,
prompting a broad SEC and Justice Department review into
accounting fraud at Chinese companies listed on U.S. stock
But investigators face difficulties in obtaining
documents and evidence from auditors in China.
In October the judge put the brakes on the SEC's request
about Deloitte, and asked why the agency was not going through
procedures set up by the Hague Convention to access that
The SEC's request to the court was complicated by Deloitte's
position in the case; its lawyers have not formally acknowledged
to the court that they are representing the firm.
On Wednesday afternoon, Robinson issued an order agreeing
with the SEC that the court had the authority to move forward
even without any acknowledgement from Deloitte's lawyers that
they had received the SEC's application.
In her Thursday order, Robinson set a schedule for both sides
to lay out their arguments in advance of a February hearing.
A lawyer for Deloitte did not immediately respond to a
request for a comment.
(Reporting By Aruna Viswanatha)
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