Chinese stocks traded in Hong Kong are the world\'s worst performers this month as allegations of fraud at some smaller companies added to concerns that slowing economic growth will hurt corporate profits. The Hang Seng China Enterprises Index of 40 Chinese companies\' H shares has retreated 7 per cent this month, the most among 91 global benchmark indexes tracked by Bloomberg. The index fell 1.1 per cent to 12,337.1, a seventh day of losses and set for the lowest close since Febuary 25. A gauge tracking China\'s dollar-denominated B shares has plunged 16 per cent in June. Overseas investors are restricted by quota from owning yuan-denominated A shares on China\'s exchanges. Regulators and investors have increased scrutiny of Chinese companies traded overseas amid allegations against Longtop Financial Technologies, Chaoda Modern Agriculture (Holdings) and Sino-Forest Corp. Shares also slid on concern the central bank will keep raising interest rates even as the global recovery falters. \"Scandals coming out will shake people\'s confidence and there will be an overhang on share prices,\" said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which oversaw $331 billion (Dh1.214 trillion) worldwide as of March 31. The declines are \"a reflection that global investors are panicky about global economic prospects and worried about Chinese monetary tightening and its slowdown effects on the real economy\", Lee said. Growth forecast The World Bank lowered its growth forecast for the world economy this year to 3.2 per cent from a January estimate of 3.3 per cent, to reflect Japan\'s earthquake and political unrest in the Middle East and North Africa. China\'s growth will slow to 9.3 per cent this year, from 10.3 per cent in 2010, and rise 8.7 per cent in 2012, the bank said. Hong Kong-based Longtop, which is listed in New York, was sued by an investor last month alleging the software provider overstated profit margins and concealed adverse facts. Chaoda, a vegetable producer which is based and has its primary listing in Hong Kong, overstated the size of some its farms in China, Next Magazine reported on May 26. The company said the report wasn\'t accurate and that it will take legal action. Short-seller Carson Block at Muddy Water Research said Sino-Forest, a Hong Kong- and Mississauga, Ontario-based operator of tree farms, overstated its timberland holdings and production, according to a June 2 report. The company, whose shares are listed in Toronto, has denied the allegation. The H-share gauge has tumbled 9.9 per cent from this year\'s high on April 11, close to the 10 per cent retreat that signals to some investors a market has entered a correction. Losses have been led this month by a 15 per cent plunge in Agricultural Bank of China, the nation\'s third-largest lender, and a 14 per cent slump in BYD Co, the Chinese carmaker.