Month: August 2015

BSE takes measures to plug tax evasion, money laundering; deep out-of-money contracts were used by entities to convert black money into white

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BSE takes measures to plug tax evasion, money laundering

Ashwin J Punnen

16 August 2015

Financial Chronicle

The Bombay Stock Exchange (BSE) is putting in place a series of measures to prevent use of its exchange platform by various unscrupulous entities to evade taxes and launder money. These measures include putting additional circuit filters on stocks that are susceptible for price manipulation and reducing the number of out of the money option contracts. The exchange recently put weekly, monthly, quarterly and yearly circuit filters on about 4000 stocks that are exclusively traded on the BSE and stocks listed on its SME and SME ITP platform. The exchange has also reduced the number of strikes in an option contracts available for trading from seven to three after it has found that deep out-of-money contracts were used by entities to convert black money into white. Continue reading →

Solar firm Hanergy is bringing its profits down to earth after related-party transactions (RPTs) stop. But the next step—getting paid by its parent—comes with strings attached. Hanergy’s parent appears to be asking for a ransom to release payments contractually due to its listed unit.

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http://www.wsj.com/articles/hanergys-high-demands-for-rehabilitation-1439811948

Hanergy’s High Demands for Rehabilitation; Solar firm Hanergy is bringing its profits down to earth, but the next step comes with strings attached

ENLARGE

ABHEEK BHATTACHARYA

Aug. 17, 2015 7:45 a.m. ET

Under regulatory pressure, Hanergy Thin Film Power is bringing down its lofty reported profits. But this once-wunderkind of the solar world may also be trying to pressure regulators into helping it merge with or buy assets from its parent. More than two months after its Hong Kong shares crashed and were suspended, Hanergy warned over the weekend that it could report a loss for the first half of the year. That is hardly surprising. Continue reading →

Doubling your frozen capital, Hong Kong style, in suspended stocks; Tianhe and Sihuan, both suspended since March, are investments of Morgan Stanley Private Equity

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http://ftalphaville.ft.com/2015/08/17/2137481/doubling-your-frozen-capital-hong-kong-style/

Doubling your frozen capital, Hong Kong style

| Aug 17 08:30 | 2 comments | Share

Jennifer Hughes in Hong Kong

And then there was $29bn in frozen capital. When we last calculated the equity value of long-suspended Hong Kong stocks in July, it came to just $12bn. News from the biggest of the new entrants to the HK freezer is not exactly lifting the tone of the group, either. Last Friday, Tianhe Chemical, with $3.7bn in market cap, warned its auditor is planning to “disclaim” its opinion of the group’s delayed 2014 accounts while the auditors for Sihuan Pharmaceutical, which provided $5.9bn of the added frozen equity, did exactly that in its (also delayed) accounts, also published last week.

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GMT: “We think Noble has simply used PwC to validate its past use of aggressive accounting so that it can continue using the same aggressive accounting without giving away any meaningful improvements in disclosure.”

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http://www.scmp.com/print/business/companies/article/1850033/troubled-noble-group-explain-how-its-business-works

Troubled Noble Group to explain how its business works

PUBLISHED : Sunday, 16 August, 2015, 11:58pm

Jing Yang jing.yang@scmp.com

Noble Group will hold an investor conference in Singapore today in another bid to fight off attacks over its accounting practices after endorsement from a second auditor failed to convince markets and detractors last week. Continue reading →

Korean regulator raids accountant for allegedly using inside information; It is the first time in 13 years that the Financial Services Commission (FSC) exercised its authority to raid people suspected of committing financial crimes

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http://www.koreatimes.co.kr/www/news/biz/2015/08/488_185070.html
Updated : 2015-08-18 17:53

Regulator raids accountant for allegedly using inside information

By Kim Jae-won

The financial regulator said Tuesday that its officials raided an accountant’s house, and searched his car and cell phone because he allegedly traded stocks using inside information. It is the first time in 13 years that the Financial Services Commission (FSC) exercised its authority to raid people suspected of committing financial crimes.  Continue reading →

Shares in China Zhongwang slumped after trading in the world’s second-largest producer of aluminium products resumed for the first time since it denied allegations of inflated sales in a short sellers’ report

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http://www.ft.com/intl/cms/s/0/2364285a-4182-11e5-9abe-5b335da3a90e.html#axzz3irTzEYqZ

Related: 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.”

August 13, 2015 1:31 pm

Shares in China aluminium group hit despite inflated sales denial

Lucy Hornby in Beijing

Shares in China Zhongwang Holdings slumped 12 per cent on Thursday after trading in the world’s second-largest producer of aluminium products resumed for the first time since it denied allegations of inflated sales in a short sellers’ report. The report by the previously unknown Dupre Analytics accused Zhongwang and Liu Zhongtian, its founder, of routing exports through undisclosed related companies. Dupre alleged this was done to obtain tax rebates from the Chinese government. Continue reading →

Jade’s ex-president jailed and fined over sham takeover bid to push up its share price

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http://www.straitstimes.com/business/companies-markets/jades-ex-president-jailed-and-fined-over-sham-takeover-bid

Related: (1) The trouble with non-binding takeover offers that create a false and manipulated ceiling for the target company’s shares which could be pledged or faced margin calls; There are numerous examples of where such buyouts have ended in tatters and some investors getting burnt; (2) China Cord Blood Corp (NYSE: CO) and Golden Meditech (801 HK): Accounting Facts and Footnotes; (3) Taiwan’s MOF asks banks for details of Chinese loans to two troubled Chinese companies – Frankfurt-listed Chinese shoe company Ultrasonic AG whose executives disappeared with the loan and Golden Meditech (801 HK); TSU raises question of insider trading in Golden Meditech TDRs; FSC boss quizzed on Lien’s Golden Meditech TDRs; (4) 脐带血功效被夸大 中源协和 (Zhongyuan Union Cell & Gene: 600645 CH) 核心业务受困; 胎盘脐带血自费存储乱象; 脐带血：是生命种子，还是炒作噱头？“变了味”的脐带血; 脐带血保存，一场骗局? 血疑——上海市脐血库事件调查; Inside the Private Umbilical Cord Blood Banking Business: Wall Street Journal Analysis Found Dirty Storage, Leaky Blood Samples and Firms Going Under

Jade’s ex-president jailed and fined over sham takeover bid

Soh made a takeover offer for Jade Technologies in a bid to push up its share price.ST FILE PHOTO

5 HOURS AGO

Chong Koh Ping

The former president of Jade Technologies was sentenced yesterday to eight years and nine months’ jail and fined $50,000 for offences connected to his botched takeover bid for the company in 2008. Anthony Soh Guan Cheow, a doctor-turned-businessman, was convicted of 39 charges, including market rigging and insider trading as well as two charges of giving false reports to the Singapore Exchange and Securities Industry Council. He was given two years and six months’ jail for market rigging and jail terms ranging from six months to two years and six months for seven counts of insider trading. The sentences are the highest imposed for such offences in Singapore. This is also the first time a person has been convicted and sentenced under Section 140 of the Securities and Futures Act for making a takeover bid when he could not fulfil the obligations in the transaction. Continue reading →

Willingness to manipulate earnings helps individuals succeed in corporate accounting, according to a new academic study.

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The Corporate Culture Of Earnings Manipulation

Study Links Earnings Manipulation to Success in Corporate Accounting

Michael Cohn

10 August 2015

Accounting Today Online

Willingness to manipulate earnings helps individuals succeed in corporate accounting, according to a new academic study. The study’s authors contend that individuals who ascend to positions of authority in corporate accounting are predisposed by their personality and values to manage earnings and are hired and promoted for that very reason.

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The former boss of Singapore-listed magazine publisher and property development firm Eastern Holdings was sentenced to four years in jail yesterday for cheating with cut in related-party loan

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http://news.asiaone.com/news/crime/ex-boss-gets-jail-term-cheating#xtor=cs3-18

Ex-boss gets jail term for cheating

The former boss of Singapore-listed magazine publisher and property development firm Eastern Holdings was sentenced to four years in jail yesterday for cheating. Stephen Tay Thian Boon, 57, will also be barred from acting as a director in Singapore for five years after his release. Continue reading →

China’s Fosun (656 HK) linked to anti-corruption probe

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http://www.ft.com/intl/cms/s/0/17bc0172-40cd-11e5-b98b-87c7270955cf.html#axzz3ib8V8xw9

Related posts: Fosun’s (656 HK) Folli Follie and the receivables question; receivables were worth 280 days worth of sales at the Hong Kong subsidiary. Add in “advances to suppliers” of $82m and “other receivables” of $39m and the total hit 400 days worth of sales; Focus Media’s Backdoor China Listing Hits Snag; Shell company Jiangsu Hongda New Material being probed by regulators

August 12, 2015 11:36 am

China’s Fosun linked to anti-corruption probe

Patti Waldmeir in Shanghai

Fosun, one of China’s most internationally acquisitive companies, is defending itself against allegations that it sold property cheaply to an executive of a state-owned company who was on Tuesday jailed for corruption. A report in the official Xinhua news agency linked Fosun and its chairman Guo Guangchang, one of Shanghai’s most powerful businessmen, to another corporate leader, Wang Zongnan, the former head of state-owned Bright Food Group who was sentenced to 18 years in jail for embezzlement and bribery. Continue reading →