[Flashback] Taiwan fines XiaoMi, China should take note

http://www.youngchinabiz.com/en/taiwan-fines-xiaomi-china-should-take-note/

Posted by GOH Shu Qi, Year 3 undergrad at the School of Accountancy, Singapore Management University

AUGUST 6, 2014

Media-savvy smartphone maker Xiaomi was in the headlines for the wrong reasons last week, facing a fine and embarrassing negative publicity after being exposed for inflating its sales figures in Taiwan. The news marked the latest in a steady string of accounting scandals and other financial misreporting that have plagued overseas-listed Chinese companies for the last 3 years, undermining their credibility and casting a negative shadow on China’s own stock markets. Continue reading

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Banker tied to Olympus accounting scandal settles with U.S. SEC

http://www.reuters.com/article/2015/02/27/sec-olympus-case-idUSL1N0W11ME20150227

Posted by YEO Shu Wen, Year 4 undergrad at the School of Business, Singapore Management University

Feb 27 (Reuters) – Japanese banker Hajime “Jim” Sagawa settled civil charges on Friday for his role in a massive accounting fraud cover-up at Olympus, agreeing to be barred from working in the securities industry, U.S. regulators said. Continue reading

Earnings Management To Tunnel: Evidence from China’s Listed Companies

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.197.6710&rep=rep1&type=pdf

Posted by Hannah YAP Qing, Year 4 undergrad at the School of Accountancy, Singapore Management University

Earnings Management To Tunnel: Evidence from China’s Listed Companies

Qiao Liu Zhou (Joe) Lu

This Draft: April 2004

Abstract

This paper conducts a two-stage analysis to demonstrate that earnings management in China’s listed companies is mainly induced by the controlling owners’ tunnelling incentive. In the first stage, we relate our analysis to previous research on the Chinese listed companies which has documented their strong incentives to manage earnings in order to meet certain return on equity (ROE) thresholds. We identify tunnelling evidence in two situations where such practice has been the most conspicuous. In the second stage, we examine systematic differences in earnings management across the universe of China’s listed companies during 1999-2001. We provide cross-sectional and time-series evidence showing that firms with higher corporate governance levels tend to have less earnings management. Our empirical findings although not being able to completely exclude other explanations, strongly suggest that agency conflicts between controlling shareholders and outside investors are the main stimuli of earnings management in China’s listed companies.

[Flashback] How to Spot a Pump and Dump

http://www.forbes.com/forbes/2010/0426/investing-pink-sheets-fraud-stock-scam-madoff-spot-pump-dump.html

Posted by Latha Do NADARAJAN , Year 3 undergrad at the School of Accountancy, Singapore Management University

Bernard L. Madoff’s escapade has made you suitably wary of Ponzi schemes. Now here’s another investment scam, equally venerable, that you should be sensitive to. It is called pump-and-dump. It involves the building of feverish excitement around a tiny company in such a way that insiders can unload worthless shares on suckers.

The Securities & Exchange Commission has brought a number of cases recently against what it considers pump-and-dump artists. Unfortunately, there are slim prospects of meaningful restitution for aggrieved investors. As Bernie’s victims can tell you, assuming that securities cops will nab the bad guys in a timely fashion is a ticket to the poorhouse. Continue reading

[Flashback] Nikko Cordial execs aided fraud: panel

http://www.japantimes.co.jp/news/2007/01/31/business/nikko-cordial-execs-aided-fraud-panel/#.VQg8xdH9mB9
Posted by Latha Do NADARAJAN , Year 3 undergrad at the School of Accountancy, Singapore Management University

A special panel looking into accounting fraud at Nikko Cordial Corp. issued a report Tuesday saying top management was involved in inflating profits at the nation’s third-largest brokerage.

The findings by the panel — four outside legal experts led by Surugadai Law School professor Masaharu Hino — contradict the brokerage’s earlier contention that the fraud was perpetrated by a single employee.

In its report, the panel blames Hajime Yamamoto, Nikko Cordial’s chief financial officer from October 2001 to February 2006, for being directly involved in a fraudulent deal allegedly used to inflate profits at the brokerage.

“As the firm’s CFO, (Yamamoto) should have been fully aware of the impact that the deal would have on Nikko Cordial’s consolidated earnings,” the report states. Continue reading

[Flashback] U.S. SEC charges ex-ChinaCast execs with fraud, insider trading

http://www.reuters.com/article/2013/09/26/sec-chinacast-idUSL2N0HM1N120130926

Posted by Latha Do NADARAJAN , Year 3 undergrad at the School of Accountancy, Singapore Management University

U.S. securities regulators on Thursday charged the former chief executive of China-based ChinaCast Education Corp with stealing tens of millions of dollars from investors in a U.S. public offering. Ex-CEO Chan Tze Ngon transferred $41 million to a subsidiary that then transferred funds outside of the company, the U.S. Securities and Exchange Commission said.

Continue reading

[Flashback] Potential losses in suspected China port metals financing fraud near $900m

http://today.moneyweb.co.za/article?id=766092#.VQg8A9H9mB9

Posted by Shaun CHEW Wen Jing , Year 4 undergrad at the School of Accountancy, Singapore Management University

HSBC last week became the latest company to initiate legal action in connection with the suspected metals financing fraud at China’s Qingdao port, signalling losses could climb from the events at the world’s seventh busiest port.

Chinese authorities in May launched an investigation into whether a private metals trading firm, Decheng Mining, and its related companies used fake warehouse receipts at Qingdao Port to obtain multiple loans secured against a single cargo of metal. Continue reading