Deloitte's Sound Global Exit a Sign of Its 'Angst' - Market Talk

0719 GMT [Dow Jones] Deloitte's decision to resign as auditor of troubled Sound Global (0967.HK) is a sign of the "angst" it's gone through, says Trung Nguyen, analyst at Lucror Analytics. Sound Global wasn't doing enough to address Deloitte's "audit issues", according to an exchange filing. Short-seller Emerson Analytics identified a 2 billion yuan shortfall in the firm's books in February. The firm has since lost two independent directors, including the head of its audit committee, and it has yet to file its 2014 financial report. Sound Global plans to hire the boutique auditing firm HLB Hodgson Impey Cheng in Deloitte's place. Nguyen says this reminds him of China Solar Energy in 2011, which also saw Deloitte resign as auditor due to a "fee" issue. HLB came in, and gave China Solar Energy a clean audit. Two years later, Chinese authorities detained three of its executives on claims of fraud. (Dominique.fong@wsj.com; Twitter: @dominiquefong)