Month: August 2015

Goldman Sachs Investment Advisory has withdrawn its business from the Korean market amid criminal investigations into allegations of stock price manipulation in conveyor belt maker Dong Yang P&

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Goldman Sachs Investment Advisory closes Korean unit

28 August 2015

Maeil Business Newspaper

Goldman Sachs Investment Advisory has withdrawn its business from the Korean market amid criminal investigations into allegations of stock price manipulation. According to sources Thursday, Goldman Sachs Investment Advisory shut down its Korean business as of August 21. Regulatory approval to the business withdrawal was granted, which was posted on the Financial Services Commission website. Continue reading →

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Troubled Hanergy Thin Film Power announces massive layoffs and losses after some related-party transactions cease

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Troubled Hanergy Thin Film Power announces massive layoffs and losses
PUBLISHED : Saturday, 29 August, 2015, 2:30am
Jing Yang and Langi Chang
Embattled solar panel maker Hanergy Thin Film Power Group unveiled a sweeping restructuring plan late on Friday that will eliminate over a third of its workforce, while reporting its first half-year deficit in six years. Continue reading →

The Modus Operandi of Loan Frauds and Forewarning System to Prevent Frauds

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http://economictimes.indiatimes.com/industry/banking/finance/how-corrupt-banking-system-creates-a-mountain-of-bad-loans-makes-recovery-process-complicated/articleshow/48724651.cms?prtpage=1

How corrupt banking system creates a mountain of bad loans & makes recovery process complicated

By Suman Layak, ET Bureau | 30 Aug, 2015, 04.15AM IST

Loan FraudLoan Fraud Forewarning System Continue reading →

‘Every market misconduct, dubbed scam, has taken capital market back by 10 yrs’

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“Then we come to the question of related party transactions. In the Companies Act, only if you are directly related to that particular transaction, you are debarred from voting, but other promoters can vote. In a firm, a certain product was purchased from a private company belonging to the the wife of the promoter, and she held 2% of the share in that company. So only she was debarred. Under Sebi rules, that cannot happen. In our case, we have said that irrespective of whether you are party to that transaction, we are going by the concept of whether you are a related party or not.”
‘Every market misconduct, dubbed scam, has taken capital market back by 10 yrs’
Somya Lakhani
23 August 2015

Short interest and stock price crash risk; the relation between short interest and crash risk is driven by bad news hoarding and is more salient for firms with weak governance mechanisms, excessive risk-taking behavior, and high information asymmetry between managers and shareholders

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http://www.sciencedirect.com.libproxy.smu.edu.sg/science/article/pii/S0378426615002204

Journal of Banking & Finance Volume 60, November 2015, Pages 181–194

Short interest and stock price crash risk

Jeffrey L. Callena, , Xiaohua Fangb, , 

Highlights

  • We find evidence that short interest is positively related to future crash risk.
  • The evidence is in line with the view that short sellers detect bad news hoarding.
  • Additional findings show that the relation is more salient for specific subsamples.
  • Empirical support is provided for the main relation observed above.

Abstract

Using a large sample of U.S. public firms, we find robust evidence that short interest is positively related to one-year ahead stock price crash risk. The evidence is consistent with the view that short sellers are able to detect bad news hoarding by managers. Additional findings show that the positive relation between short interest and future crash risk is more salient for firms with weak governance mechanisms, excessive risk-taking behavior, and high information asymmetry between managers and shareholders. Empirical support is provided showing that the relation between short interest and crash risk is driven by bad news hoarding.

Why do Big Four auditors disclaim after having earlier issued unqualified opinion on proper compliance of FRS? Deloitte and PwC issue disclaimer opinions on Tianhe Chemicals and Sihuan Pharmaceutical

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http://www.chinaaccountingblog.com/weblog/why-do-auditors-disclaim.html

Why do auditors disclaim?

Aug 19, 2015, 8:46 AM

Last week Tianhe Chemicals (Tianhe), a Chinese company listed in Hong Kong,announced that its auditor, Deloitte, was planning to disclaim an opinion on its financial statements. Tianhe was the target of an activist short seller campaign by Anonymous Analytics last September and a damaging analysis by theAssociated Press in November. Also last week Sihuan Pharmaceuticals (Sihuan) published its annual report for 2014 including a disclaimer opinion on its financial statements by auditor PwC. PwC used seven pages to explain why it was unable to express an opinion on the financial statements. Both stocks remainsuspended.

Disclaimer opinions are rare, so two in one week is notable. These opinions are rare because they are useless to companies and investors, so companies generally will not accept them. Regulators and exchanges are unlikely to accept a disclaimer opinion, which explains why these stocks are suspended and are likely to remain so. Continue reading →

MSCI Removes Hanergy From Indexes; Move allows funds to dispose of millions of dollars they have locked up in Hanergy shares

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http://www.wsj.com/articles/msci-removes-hanergy-from-indexes-1440674216?tesla=y

MSCI Removes Hanergy From Indexes; Move allows funds to dispose of millions of dollars they have locked up in Hanergy shares

MSCI is the latest of four major index compilers to remove Hanergy. PHOTO: REUTERS

WAYNE MA And JACKY WONG

Aug. 27, 2015 7:16 a.m. ET

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HONG KONG—Stock-index compiler MSCI Inc. ejected a troubled Hong Kong solar-power company from its indexes, enabling some of the world’s biggest investment managers to dispose of hundreds of millions of dollars they have locked up in the firm’s shares. Continue reading →

Governance in group entities still a potential weak spot

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http://www.businesstimes.com.sg/companies-markets/governance-in-group-entities-still-a-potential-weak-spot

Governance in group entities still a potential weak spot

Parent boards must be aware of the financial and reputational damage a problem at a subsidiary can cause and take proactive steps.

COMPANIES still have a long way to go to improve corporate governance standards at their subsidiaries, according to governance experts.

Some large multinational corporations have recognised that the governance of group entities or subsidiaries can be a significant problem and have started to take action to improve their internal processes and procedures to address the issues. Continue reading →

Tech challenges, severed related-party contracts cloud Hanergy’s outlook

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http://www.reuters.com/article/2015/08/25/hanergy-tfp-outlook-idUSL3N10V2S120150825

Tue Aug 25, 2015 12:02am EDT

Tech challenges, severed contracts cloud Hanergy’s outlook

* HTF to publish H1 results on Aug. 28, said net loss likely

* HTF in need of new clients after severing links with parent

* Company is under investigation by Hong Kong market watchdog

By Umesh Desai

HONG KONG, Aug 25 (Reuters) – Hanergy Thin Film Power Group Ltd (HTF), which is being probed by Hong Kong regulators after its stock suddenly plunged, will have to convince shareholders about its outlook after it cut ties with its parent, which last year alone bought about two-thirds of its solar panel making equipment. Continue reading →

Singapore-listed S i2i, which makes phone handsets and provides other services, finds accounting, stock problems at units; “There were also accounting matters identified relating to an inter-company transfer of asset”

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http://www.straitstimes.com/business/companies-markets/telco-finds-accounting-stock-problems-at-units

Telco finds accounting, stock problems at units

A telecommunication company has found accounting discrepancies at one of its local units, including staff creating false evidence, and lapses regarding goods at an Indonesian unit.

S i2i, which makes phone handsets and provides other services, told the Singapore Exchange (SGX) yesterday that the problems had been detailed by consultants EY Advisory and BDO, which were engaged earlier this year after allegations surfaced.

EY Advisory focused on Singapore-based information technology firm Cavu Group, which was alleged to have “certain irregularities in the accounting records”. BDO looked at Selular Group in Indonesia, where certain quantities of cellphones marked as sold were supposedly not delivered. Continue reading →