[Flashback] AgFeed Agrees to Pay $18 Million to Settle SEC Accounting Fraud Case


Posted by Amy CHAN Wen Yi, Year 4 undergrad at the School of Accountancy, Singapore Management University

A Chinese animal-feed and hog-production company has agreed to pay $18 million to settle Securities and Exchange Commission allegations that it reported fake revenue to meet financial targets and boost its stock price, the SEC said Monday.

AgFeed Industries Inc. inflated its revenue by $239 million by creating fake invoices for the sale of feed and purported sales of hogs that didn’t actually exist, among other methods, the SEC said when it filed suit against the company in March. The moves boosted the company’s annual revenue over a 3 ½-year period by amounts ranging from 71% to 103%, according to the SEC. Continue reading


[Flashback] Muddy Waters alleges fraud at Superb Summit

Muddy Waters alleges reported revenues came from non-existent unit

Hong Kong shares of Superb Summit International Group were suspended at 11.19am yesterday, after US short-seller Muddy Waters released a report alleging fraud at the loss-making company.

Continue reading

Do investors overvalue firms with bloated balance sheets? Noble overstated commodity values by at least $3.8 bln – Iceberg Research

A helpful critical thinking framework relevant for Noble Group, as well as many of the S-chips that include China Environment, the company that Terence, Roy, Shan Rui, Ronald, John have wrote and discussed about.


Journal of Accounting and Economics Volume 38, December 2004, Pages 297–331

Do investors overvalue firms with bloated balance sheets? 

David HirshleiferKewei HouSiew Hong TeohYinglei Zhang


When cumulative net operating income (accounting value-added) outstrips cumulative free cash flow (cash value-added), subsequent earnings growth is weak. If investors with limited attention focus on accounting profitability, and neglect information about cash profitability, then net operating assets, the cumulative difference between operating income and free cash flow, measures the extent to which reporting outcomes provoke over-optimism. During the 1964–2002 sample period, net operating assets scaled by total assets is a strong negative predictor of long-run stock returns. Predictability is robust with respect to an extensive set of controls and testing methods. Continue reading

[Flashback] Qingdao Port says unit sued by Pacorini for $58.4 million amid fraud probe


Posted by YEO Wei Lin, Year 3 undergrad at the School of Accountancy, Singapore Management University

Sat Aug 16, 2014 1:52am EDT

Reporting by Fayen Wong; Editing by Michael Perry

(Reuters) – China’s third-largest terminal Qingdao Port International, which is embroiled in an alleged financing scam, has received two lawsuits from global warehousing firm Pacorini Logistics claiming a total of $58.4 million, the firm said. Continue reading

[Flashback] Transmile – the fall of a national cargo carrier


Posted by Valerie NG, Year 3 undergrad at the School of Accountancy, Singapore Management University

Posted on 2 September 2014 – 05:38am

Written by Eva Yeong

PETALING JAYA: It is ironic that on the same day that Khazanah Nasional Bhd announced its latest recovery plan for troubled national carrier Malaysian Airline System Bhd (MAS) that, once a designated national cargo carrier, Transmile Group Bhd held its third AGM as a private company. Continue reading

SEC Probes Companies’ Treatment of Whistleblowers; Agency Officials Concerned About Corporate Backlash Against Whistleblowers


SEC Probes Companies’ Treatment of Whistleblowers

Agency Officials Concerned About Corporate Backlash Against Whistleblowers

The Securities and Exchange Commisssion has made a push to bring more whistleblower cases since the 2010 passage of the Dodd-Frank financial-reform bill, which created the agency’s whistleblower program. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES


Feb. 25, 2015 9:00 p.m. ET

The Securities and Exchange Commission is probing whether companies are muzzling corporate whistleblowers.

In recent weeks the agency has sent letters to a number of companies asking for years of nondisclosure agreements, employment contracts and other documents, according to people familiar with the matter and an agency letter viewed by The Wall Street Journal. The inquiries come as SEC officials have expressed concern about a possible corporate backlash against whistleblowers. Continue reading

Lightning strikes twice: $7m fraud at ASX-listed transport group K&S Corporation, controlled by the family of the late trucking magnate Allan Scott


Lightning strikes twice: $7m fraud at firm controlled by family of late BRW Rich Lister Allan Scott

February 25, 2015 – 5:19PM

Simon Evans

Lightning does strike twice. In a bizarre turn of events, the ASX-listed transport group K&S Corporation, controlled by the family of the late trucking magnate Allan Scott, has uncovered a $7.1 million corporate fraud with the help of forensic accountants McGrathNicol.

The misappropriation of funds comes more than a decade after the company was in the spotlight after a much larger fraud of $22 million was revealed, with the former financial controller of K&S and other entities in Mr Scott’s empire sent to jail in a totally separate set of events. Continue reading

Recent major accounting scandals have caused financial decision makers to question their data


Posted by LAM Xin Hui, Year 4 undergrad at the School of Accountancy, Singapore Management University

16 February 2015 · By Shané Schutte

The finance sector has seen a plethora of fraudsters as of late, so it’s not hard to see why financial decision makers are starting to question their data.  Continue reading