China Investors Face Wake-Up Call in Sound Global Slide
April 1, 2015
(Bloomberg) — A Beijing-based water treatment company is fueling concern about corporate-governance risks in China as its bonds fall by a record after it flagged potential audit issues.
Sound Global Ltd.’s U.S. currency 2017 notes slid 22.3 cents to 68 cents on the dollar as of 5:10 p.m. in Hong Kong after it said in a filing Tuesday that audit work will be continued as issues are not resolved. The debentures have tumbled from 108 cents at the beginning of the year, after research firm Emerson Analytics Co. alleged in February Sound Global exaggerated revenue.
One Woman’s Crusade for Samsung Family to Repay $2.2 Billion IPO Windfall
April 1, 2015
(Bloomberg) — As a student, Park Young Sun always enjoyed standing up to the big boys.
“She was the unofficial head of all the girls and would confront boys that bullied or played pranks on them,” said Bruce Lee, a fund manager who first met the three-term opposition lawmaker almost five decades ago when they were seven-year-olds in elementary school in Seoul.
Park has shifted her sights from schoolyard bullies to business titans and her latest target is as powerful as they come: the family behind the nation’s biggest conglomerate or chaebol, Samsung Group. She says they should pay back profits from a 1999 deal later ruled by courts to be illegal — money she says the family may use to fund the transfer of assets to the children of Samsung patriarch Lee Kun Hee. Lee remains hospitalized following a heart attack. Continue reading
Mar 31, 2015
Class-Action Lawsuits Follow SEC Interest in Accounting Issues
The number of securities class-action lawsuits alleging accounting fraud jumped 47% in 2014, even as the overall number of securities class actions was little changed, according to a new report from Cornerstone Research issued Tuesday. The increase stems partly from a similar jump in accounting-fraud enforcement cases brought by the Securities and Exchange Commission, Cornerstone said, as the SEC renewed its focus on financial-reporting and disclosure issues in 2014 after several years of focusing on other matters. Continue reading
Accounting Class-Action Filings Jumped 47% Last Year
LOS ANGELES (MARCH 31, 2015)
BY MICHAEL COHN
Filings of securities class actions with accounting-related allegations increased 47 percent in 2014, according to a new study. The study, by Cornerstone Research, found that accounting settlements represented the majority of the number and dollar value of total settlements. After two years of relatively low activity, 69 new cases were filed with accounting allegations, compared with 47 in 2013 and 45 in 2012. Continue reading
March 31, 2015 2:30 pm
Japan to tighten scrutiny of IPOs
Kana Inagaki in Tokyo
Japan’s main exchange operator is taking steps to restore confidence in the stock market after an investor outcry over a recent string of questionable initial public offerings. Atsushi Saito, chief executive of Japan Exchange Group, said on Tuesday that JPX will toughen the screening process for companies seeking listings by requiring them to disclose more detailed information on their earnings outlook. It will also tighten checks on accounting practices. The move came after several Japanese companies over the past year disclosed accounting irregularities or revised their guidance shortly after their shares floated on the Tokyo Stock Exchange. Continue reading
Distressed Diva Loved Her Companies Too Much to Mark Them Down
5 MAR 31, 2015 9:42 PM EDT
By Matt Levine
Yesterday, the Securities and Exchange Commission brought civil securities fraud charges against Lynn Tilton and her firm, Patriarch Partners. Lynn Tilton once had a television show called “Diva of Distressed.” “It’s only men I strip and flip,” she said in the pilot. “My companies I keep long-term and close to my heart.” Here is a Jessica Pressler profile of Tilton in which a former employee complains that “the experience of working for Tilton was so emasculating that it took him months after leaving the firm to have sex again.” Lynn Tilton is what people call a colorful character, is the point I am trying to convey. Continue reading
(2083) China Flooring Holding Company Limited: Nature Home Holding Company Limited issued profit warning for the year ended 31 December 2014 due to the recognition of a substantial decrease in fair value of the Group’s biological assets.
Related: Late audits halt trading in Morgan Stanley-backed stocks Tianhe Chemicals (1619 HK) and Sihuan Pharmaceutical (460 HK)
Hanergy Is Still a Head Scratcher
Updated March 31, 2015 4:44 a.m. ET
For anybody who expected big numbers out of the world’s most valuable clean energy company, Hanergy Thin Film Power didn’t disappoint. The Chinese solar company whose shares have vaulted 450% in the past year reported late Monday that its 2014 revenue nearly tripled, and net profit rose 64%. As common as these numbers might start to look, though, they are still strange. Hanergy makes equipment to build niche kinds of solar panels that are either so inefficient that they have been abandoned by peers, or so new that the economics are untested. How this business commands a $36 billion market value, more than Tesla’s, raises doubts.
A closer look at Hanergy’s 2014 results keeps raising doubts, too. Out of $1.2 billion of revenue in 2014, 62% comes from selling equipment to its closely held parent, Hanergy Holding Group, who then builds solar panels. But much of what goes to the parent seems to come back, since between 2015 and 2017, the parent plans to sell panels back to listed Hanergy worth as much as $6.1 billion, according to separate filings in February. Continue reading