July 1, 2015 8:11 pm
A prison ID in one hand — and a CFO award in the other
David Sheppard and Neil Hume
Andrew Fastow, former Enron CFO, complete with prison ID card
Former Enron chief financial officer Andrew Fastow says that following accounting rules to the letter contributed to the infamous collapse of the US energy trader and landed him in jail.
In a candid and wide-ranging presentation at the FT Camp Alphaville summit, dubbed “The Smart Guy in the Room”, he cautioned that modern accounting methods could be legal while still presenting a misleading picture of a company’s health.
“There may be a fundamental difference between a company following the rules and a company presenting a true picture of its financial position,” he told an audience assembled for the annual get-together for the FT’s financial and markets bloggers and its readers. Continue reading
June 29, 2015 7:17 am
China graft probe uncovers falsified revenues at large SOEs
Patti Waldmeir and Gabriel Wildau in Shanghai
China’s state auditor has uncovered falsified revenues and profits in the accounts of some of the country’s biggest state-owned companies, as Beijing broadens its assault on official corruption.
The National Audit Office said on Sunday that 14 state-owned groups, including well-known names such as State Grid, China Ocean Shipping Co (Cosco) and China Southern Power Grid, falsified nearly Rmb30bn ($4.8bn) in revenue and nearly Rmb20bn in profits in 2013. Continue reading
July 2, 2015 4:52 am
Hong Kong share suspensions irk investors
Jennifer Hughes in Hong Kong
When Silchester first bought into the South China Morning Post, the fund manager was investing in a group once touted as the most profitable newspaper in the world. Seventeen years later, the media landscape has changed dramatically but Silchester’s investment has not — partly because SCMP Group shares have been frozen for two-plus years by Hong Kong rules that allow stocks to languish for years without being traded. The issue is a perennial source of frustration for investors, particularly given the city’s status as Asia’s leading stock market and the gateway to China. “We find the whole saga astounding — we would not expect such an affair in any developed stock market,” says Stephen Butt, chairman and chief executive of Silchester International Investors, which holds 14 per cent of SCMP Group. He adds: “Our clients, who include many leading international foundations, endowments and charities, are suffering. Why should their interests be abused in this way and to whose benefit?”
About $12bn of equity capital is trapped in companies that have not traded in at least three months — a number that will more than double if Hanergy Thin Film, now frozen for six weeks following its spectacular fall from grace, does not resume trading soon. Continue reading
Ex-securities broker jailed after counseling Olympus on hiding losses
JUL 1, 2015
The Tokyo District Court on Wednesday sentenced a 61-year-old former securities broker to four years in prison for counseling the management of major optical equipment-maker Olympus Corp. on hiding massive losses. Continue reading
Taiwanese ‘Wolf of Wall Street’ nabbed for alleged fraud
Saturday, June 27, 2015
TAIPEI–Lo Hsu-liang (羅栩亮), head of Taoyuan-based biotech product supplier Zodic Light World Technology Inc. (兆良科技) was arrested Friday morning immediately upon returning to Taiwan from abroad. Lo sold shares of Zodic to investors to rake in about NT$1 billion (US$32.26 million) after allegedly disseminating false information about the prospects of his company. Continue reading