Fri Jun 12, 2015 7:32am EDT
GMT Research report questions AirAsia accounting practices
KUALA LUMPUR, JUNE 12 | BY YANTOULTRA NGUI
Hong Kong-based GMT Research has issued a report questioning airline AirAsia Bhd’s accounting practices, accusing it of using transactions with associate companies to boost its earnings, according to a copy obtained by Reuters. The report was issued on June 10 to GMT’s subscribers and since then shares in the low-cost carrier have lost 14 percent or 812 million ringgit ($215 million) in market value. “We are in discussions with the company about our concerns,” GMT’s founder Gillem Tulloch said in a statement on the research house’s website. Continue reading
Noble Shares Resume Slide Amid Accounting Questions
Shares finished the week with a 3.5% decline
Updated June 12, 2015 8:05 a.m. ET
HONG KONG—Efforts by Noble Group Ltd. to stem its sliding stock price were frustrated Friday as questions about its accounting practices continued to dog the embattled commodities trader. Shares finished the week with a 3.5% decline, bringing losses to 15% since Michael Dee, a former senior executive at Morgan Stanley and Singapore’s sovereign-wealth fund Temasek Holdings Pte. Ltd., two weeks ago emerged as Noble’s latest critic and helped to spark a renewed decline in the stock. Its shares are down 40% this year.
Questions raised by ratings firm Standard & Poor’s cast a pall over the company Friday, cutting short a startling stock surge on Thursday after Noble appealed for patience from its investors and employees and bought back millions of its own shares. S&P cut its outlook on the company’s debt to “negative” from “stable” while reaffirming its triple-B-minus rating, an investment-grade designation one level above junk territory. Continue reading
June 13, 2015 2:27 am JSTnny numbers
Toshiba accounting irregularities fall into 2 cases
TOKYO — Toshiba‘s iffy accounting came under a brighter spotlight Friday, when details on nine infrastructure-related projects with inflated profits were made public. Half of the profit inflation on a yen basis was posted for fiscal 2013, while many cases already had indications of possible future problems at the time of the order or relied on unrealistic cost-cutting plans. These details all point to lax bookkeeping under increased pressure to make budget or earnings targets.
The problem centers on the percentage-of-completion method, used for long-term construction contracts. Final profit margins and costs are estimated, and profit is accordingly posted for each accounting period. But such estimates tend to be subjective. Continue reading
Stock manipulation: Dalal Street Investments
10 June 2015
A perfect example of a pump and dump stock, Dalal Street Investments rose by 11600% and soon declined 97%
Listed on the BSE in 2001, Dalal Street Investments (DSI) ostensibly deals in shares and securities. Over the past four quarters ended March 2015, DSI reported total revenue of just Rs19 lakh and a net loss of Rs36 lakh. With a market-cap of Rs9 crore as on 28 May 2015, over the past nine years, the stock price movement of DSI has been amazing. It rallied smoothly and unimpeded from around Rs100 in March 2006 to a peak of Rs11,700 in June 2011, a rise of 11,600%. The smooth rally was a result of the stock being locked in its upper circuit of 2%, on each day that it was traded, day after day! Even the global financial crisis did not create any volatility in the stock. After hitting this peak, it started trending downward. This time, again, the downtrend was predictable, constantly hitting the lower circuit. From June 2011 to 26 May 2015, the stock declined by as much as 97%, from Rs11,700 to Rs306. On an average, there were just four or five trades each time the stock was traded since March 2006. In June 2013, DSI was debarred from trading in securities by SEBI for not complying with the minimum public shareholding requirement.