Siwei

Just when you thought you had heard the last of Chinese reverse mergers, along comes another accounting scandal that puts them back in the spotlight again.

The victim this time? Caterpillar, which on Friday stunned the market with news that it would have to take a $580m write down in the fourth quarter after it unearthed accounting irregularities at ERA Mining Machinery, a Chinese company that it acquired last June for $886m.