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Shady accounting cases emerge at Japan ventures in China

Local arms of Daiwa House and Rhythm Watch hit with governance failures

Shanghai's business district. Japanese companies often entrust many duties to Chinese joint venture partners.   © Reuters

TOKYO -- Accounting irregularities have cropped up at a number of Japanese companies' Chinese affiliates, revealing struggles with corporate governance as the businesses expand abroad.

Large sums look to have been misappropriated at the Chinese joint venture of homebuilder Daiwa House Industry and a production arm of timepiece maker Rhythm Watch appears to have been systematically underreporting cost prices.

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