Aluminium products maker China Zhongwang hit with book-cooking and fraud allegations; Liu and parties related to him took out some HK$36.5 billion in loans from mainland banks, and used the funds to buy Zhongwang’s aluminium products since 2011. HK$38.5 billion of Zhongwang’s revenues has been “fraudulent sales to Liu-controlled undisclosed related parties”. “If Zhongwang is on the hook for these loans, it could be insolvent.”

Aluminium products maker China Zhongwang hit with book-cooking and fraud allegations

PUBLISHED : Sunday, 02 August, 2015, 8:45pm

Eric Ng

Extruded products maker China Zhongwang says short seller’s claims are groundless and auditors have never cast doubt on statements

China Zhongwang Holdings, which raised HK$9.8 billion from an initial public offering in Hong Kong in 2009, is fighting allegations from an unknown short seller, Dupre Analytics, that chairman Liu Zhongtian and his family have been siphoning money from the company.

Zhongwang suspended its share trading on Friday after Dupre published the report and said in a stock exchange filing the allegations were “groundless”, adding its external auditors had never cast doubt on its financial statements since its listing.

In the 51-page report, Dupre said Liu and his family were committing “the largest and most complex China fraud ever uncovered” and have “systematically defrauded investors, [fabricated] at least 62.5 per cent of revenue since 2011 and likely skimming billions of [capital expenditure] from the delayed [production facility] in Tianjin”.

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China’s Sihuan Pharm (460 HK) reports long delayed earnings and accounting overhaul; Sihuan’s auditor PwC issued a disclaimer of opinion as it was unable to obtain sufficient evidence to form an audit opinion.

Related postings: Late audits halt trading in Morgan Stanley-backed stocks Tianhe Chemicals (1619 HK) and Sihuan Pharmaceutical (460 HK)Sihuan (460 HK) Updates on Audit Delay: Improper accounting treatment in consolidation trick of using MRAs (Market Research Agents) to exclude hidden sales and distribution expenses to artificially boost profits

China’s Sihuan Pharm reports long delayed earnings and accounting overhaul

PUBLISHED : Monday, 03 August, 2015, 10:11am

Sihuan Pharmaceutical released its long-delayed 2014 annual earnings on Monday morning, and major restatements of its financials involving its sales and marketing activities.

Sihuan, one of mainland China’s largest prescription drugmaker, reported net profits up 30 per cent to 1.7 billion yuan (HK$2 billion). The earnings were released four months later than required, as the company, backed by a Morgan Stanley private equity fund, had to rectify some of its accounting practices.

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How FTIL lost face in the two years since NSEL crisis; Only time will tell if the 30,000 investors that regulators claim lost in the scam would get back their money and whether the real guilty entities will get any kind of punishment.

How FTIL lost face in the two years since NSEL crisis

Ashish Rukhaiyar

31 July 2015


Mumbai, July 31 — Shares of Financial Technologies (India) Ltd (FTIL) closed at Rs.541.55 on 31 July 2013, a level it has never reached in the two years since the Rs.5,574 crore settlement fraud at the National Spot Exchange Ltd (NSEL) came to light. FTIL holds 99.99% stake in NSEL. Continue reading

Castex Technologies, a subsidiary of auto component major Amtek Auto, in share price manipulation scandal

Bondholders cry foul on Castex Technologies’ FCCB move

Pranav Nambiar

1 August 2015

Financial Express

Castex Technologies, a subsidiary of auto component major Amtek Auto, on Friday passed a resolution calling for the conversion of its $200 million foreign currency convertible bonds (FCCBs) into equity, despite bondholders writing to the company and the Securities and Exchange Board of India warning that the move is possibly the result of a manipulation of stock prices, report Pranav Nambiar, Pallavi Ail and Ankit Doshi in Mumbai. The bondholders have also requested Sebi and the exchanges for an investigation into the matter. Continue reading

Sebi cautions investors against fraud public offers

Sebi cautions investors against fraud public offers

Ashish Rukhaiyar

1 August 2015


Mumbai, Aug. 1 — The Securities and Exchange Board of India (Sebi) has cautioned investors against investing money in companies that make a public offer without complying with the necessary legal and regulatory framework. Since January 2013, the capital market watchdog has taken action against 193 such entities, according to a press release issued on Friday.

“Some unlisted companies are luring retail investors by issuing securities, including non-convertible and convertible debentures/ non-convertible and convertible preference shares/ equity shares in the garb of private placement, without complying with the provisions of Companies Act, 1956 read with the Companies Act, 2013, Sebi (Issue and Listing of Debt Securities), Regulations, 2008, Sebi (Issue and Listing of Non-Convertible Redeemable Preference Shares), Regulations, 2013 and Sebi (Issue of capital and Disclosure Requirements) Regulations, 2009,” said the release. Continue reading