Late audits halt trading in Morgan Stanley-backed stocks
30 March 2015
WASHINGTON (AP) — Two major companies in a prominent $1.4 billion Asia investment fund managed by New York banking giant Morgan Stanley unexpectedly told securities regulators they will not file their financial statements on time and froze trading in their stocks, actions generally considered to be cause for concern. The publicly traded companies, Tianhe Chemicals Group Ltd. and Sihuan Pharmaceutical Holdings Group Ltd., separately announced late last week that they would be unable to meet Hong Kong Stock Exchange deadlines because auditors have not yet signed off on their financials. Both companies pledged to cooperate with the auditors.
Tianhe and Sihuan are valued at $3.7 billion and $6 billion, respectively. They are among 16 companies that comprise a private equity fund managed by Morgan Stanley & Co. LLC, known as Morgan Stanley Private Equity Asia Three, or MSPEA III. An Australian and an Indian company owned by that fund have already failed amid criminal and civil fraud allegations. Continue reading
Hyundai Elevator Share Plan Frustrates Foreign Investors; Schindler Holding fails to stop Hyundai Elevator from revising rules on new shares
Updated March 27, 2015 1:58 a.m. ET
SEOUL—The failure of a Swiss elevator maker to stop a Hyundai Group company from revising its rules to increase share capital has frustrated foreign investors who want changes to South Korea’s corporate governance. Continue reading
Updated : 2015-03-29 20:26
Dongkuk Steel offices raided over embezzlement allegations
By Chung Hyun-chae
Prosecutors raided the head offices of Dongkuk Steel, the nation’s third-largest steel company, and the residence of its Chairman Chang Sae-joo as part of a probe into allegations of embezzlement and tax evasion within the firm.
About 50 investigators from the Seoul Central District Prosecutors’ Office seized accounting books, overseas trade records, and related computer files from the company’s headquarters in central Seoul and the offices of its affiliates from Saturday through early Sunday morning. Continue reading
Updated : 2015-03-29 18:25
Prosecution probes fraud allegations at Keangnam
By Kim Rahn
Prosecutors are investigating allegations of fraudulent accounting at Keangnam Enterprises, a construction company at the center of a probe into the Lee Myung-bak administration’s failed “energy diplomacy.” Prosecutors suspect that the company fabricated its financial situation while it was in the debt workout program. They believe the company did this in order to qualify for the government’s special loans for overseas energy development projects. Continue reading
It’s Time to Look Under the Hood of China’s CAR
Updated March 15, 2015 10:14 p.m. ET
China’s largest car-rental firm has novelty, size and, now, technology on its side. But at the end of the day, it’s still a company that could get weighed down shifting big assets back and forth. Shares in CAR, previously called China Auto Rental, climbed 34% after the company’s Hong Kong initial public offering last September. Investors couldn’t wait to drive away with this rare public play on growing Chinese auto-rental demand. The company, which counts Hertz as a major shareholder, controls a third of the market. Investors again piled into the stock Thursday after CAR announced that it would rent vehicles to an Uber-like Chinese service called UCar. CAR also reported that it swung to a big net profit in 2014 after a loss in 2013.
Before investors start awarding CAR an Uber- or Lyft-like valuation, though, it’s worth remembering the more mundane costs involved in managing a capital-intensive fleet of auto rentals. One key expense is depreciation of aging cars. CAR’s depreciation charges fell last year in absolute terms, dropping to 19% of total revenue from 26% in 2013. Falling depreciation played a part in CAR’s robust 23.4% operating profit margin last year. That’s puzzling because depreciation should have risen as CAR expanded its fleet by 20% last year. Depreciation is equal to 31% of revenue at New York-listed Chinese rental firmeHi Car Services, and about 24% at Avis Budget Group. Unlike Avis, CAR can’t lock in any depreciation expenses because Chinese auto makers don’t promise to buy back cars at predetermined prices as U.S. counterparts do. Continue reading
March 27, 2015 7:27 pm
Tax havens told to drop opposition to UK call for central register
Leading offshore financial centres have been told to rethink their opposition to David Cameron’s demand that they create a central register revealing companies’ ultimate owners.
The government has told the British Virgin Islands and the Cayman Islands to set out specific timetables for implementing central registers or similar systems by November. It has also written to Bermuda, which already has a central register, asking it to make the information more accessible to law enforcement agencies. Continue reading
Updated : 2015-03-27 17:40
Ascender loses fight against Infovine CEO
By Kim Jae-won
Ascender Capital, a Hong Kong-based hedge fund, failed to change the corporate governance of Infovine at the local information technology company’s shareholders’ meeting on Friday.
Infovine reappointed its CEO, Kwon Seong-jun, at the meeting despite opposition from Ascender, which has accused Kwon of harming minor shareholders’ interests. Ascender, which owns 3 percent of Infovine, said Kwon had enriched himself at the expense of all other shareholders by issuing bond warrants in August 2013. Continue reading