Incorrect accounts are the board’s problem

http://www.thestar.com.my/Business/Business-News/2015/09/19/Incorrect-accounts-are-the-boards-problem/?style=biz

Incorrect accounts are the board’s problem

Saturday, 19 September 2015

By: ERROL OH

WHEN the accounts of a listed company turn out to be unreflective of the company’s financial performance and position, there are several options for enforcement action. The worst-case scenario (for those responsible for the accounts, that is) is when the regulators take court action that may lead to heavy punishment. Perhaps the best-known example began in July 2007, when three former top executives of Transmile Group Bhd were charged with abetting the cargo airline in making a misleading statement about reported revenue of RM338mil. This referred to the company’s quarterly report that contained the unaudited consolidated results for the financial year ended December 2006. If convicted, the trio – Gan Boon Aun, Lo Chok Ping and Khiudin Mohd – are liable to a fine of not less than RM1mil and a prison term of up to 10 years. Continue reading

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Department of Special Investigation (DSI) has filed criminal charges against Chai Bunnag and 11 accomplices over the alleged manipulation of Solution Corner 1988 (SLC) shares back in 2010

DSI accuses 12 of share manipulation
16 September 2015
The Nation12 called to report after new evidence in share case

THE Department of Special Investigation (DSI) has filed criminal charges against Chai Bunnag and 11 accomplices over the alleged manipulation of Solution Corner 1988 (SLC) shares back in 2010.

DSI sources said notices have been issued for the accused to report to DSI officials by the end of this week. The investigation into this case moved forward after authorities found new evidence that was not known in 14 previous and related cases dropped by public prosecutors. Continue reading

Stock manipulation: GR Cables

Stock manipulation: GR Cables
16 September 2015
Why is the loss-making GR Cables generating such humungous gains and displaying extreme volatility? GR Cables supposedly manufactures telecom cables. In its annual report for FY13-14, the management states that, due to non-availability of sufficient working capital facilities, it was unable to execute any business. They further mention that they are exploring various options to raise the required funds through additional equity and debt. In FY13-14, GR Cables reported revenue of just Rs4.78 lakh and a net loss of Rs30.01 lakh. In FY14-15, the Rs2-crore market-cap company reported negligible sales and a net loss of Rs27.88 lakh. It has reported a net loss in each of the past 18 quarters. Yet, over a period of about 18 months, the stock rallied 305% to Rs0.77 on 8 September 2015, from Rs0.19 on 26 February 2014. Over this period, on most occasions, there have been just one or two trades a day. Much of the gain came between 6 April 2015 and 1 June 2015. In this two-month period, the stock shot up 197%, from Re0.31 to Re0.92. By the end of June 2015, the stock declined 27%, to Rs0.67, before rallying again. Why is a loss-making company generating such humungous gains and displaying extreme volatility? Will the regulators investigate?

The Serious Fraud Investigation Office or SFIO is probing alleged mismanagement of over Rs 8,000 crore of funds since 2005, when liquor baron Vijay Mallya’s UB Group-controlled Kingfisher Airlines and United Spirits

United Spirits Falls on Inquiry Over Vijay Mallya’s Kingfisher Airlines
NDTV
16 September 2015
United Spirits shares traded down for a second consecutive session, falling as much as 1.6 per cent against 0.8 per cent gain in the broader markets on Wednesday. Traders attributed the selling in United Spirits – India’s biggest liquor company- to the ongoing investigation in former group firm Kingfisher Airlines over alleged diversion of funds.

The Serious Fraud Investigation Office or SFIO is probing alleged mismanagement of over Rs 8,000 crore of funds since 2005, when liquor baron Vijay Mallya‘s UB Group-controlled Kingfisher Airlines and United Spirits, according to media reports. Continue reading

Pressure to show a profit led to Toshiba’s accounting scandal; Toshiba auditors say being investigated by Japan regulators

http://www.japantimes.co.jp/news/2015/09/18/business/corporate-business/pressure-to-show-a-profit-led-to-toshibas-accounting-scandal/#.Vf05ovmqpBc

Pressure to show a profit led to Toshiba’s accounting scandal

BY KAZUAKI NAGATA

STAFF WRITER

SEP 18, 2015

Manufacturing giant Toshiba Corp.’s president and seven other directors were forced to resign when an investigation revealed in July that the firm had doctored the books and had padded its profits over the past seven years to the tune of hundreds of billions of yen. The case is one of Japan’s biggest corporate scandals in years. The 140-year-old company is set to make a fresh start on Sept. 30 when it holds an emergency shareholder meeting to approve a new management team. But what was going on with Toshiba and why was it inflating its profits? Here are some questions and answers about Toshiba’s accounting problems. Continue reading

Will YuuZoo’s new funding deal wreck its share price?

http://www.businesstimes.com.sg/opinion/will-yuuzoos-new-funding-deal-wreck-its-share-price

Will YuuZoo’s new funding deal wreck its share price?

anita gabriel

18 September 2015

Business Times Singapore

IT may come across as a simple deal, but YuuZoo Corp’s recently announced S$30 million funding facility from US-based fund GEM Global is by no means heartening for investors saddled by the anaemic showing of its stock since its debut on the Singapore Exchange a year ago. Continue reading

Accounting Rife with Estimates Haunted Toshiba

Accounting Rife with Estimates Haunted Toshiba

David M. Katz

9 September 2015

CFO.com

The Japanese conglomerate’s woes may have much to do with percentage-of-completion accounting.

Toshiba’s ongoing accounting scandal, which reached a peak on Monday, when the company announced a reported $1.9 billion earnings writedown involving fiscal periods reaching back seven years, has spotlighted a broader financial reporting problem that has bedeviled standard setters for years: how to keep fraudulent earnings management out of revenue recognition. Continue reading

SEC’s latest prosecution: it is possible to pursue individual auditors for missing signs of fraud they should have caught; SEC steps up enforcement actions against CPAs for cooking books; BDO to Pay $2.1 Million to Settle SEC Charges over False and Misleading Audit Opinions

http://ftalphaville.ft.com/2015/09/10/2139813/fraudit-failure/

Fraudit failure

Dan McCrum

| Sep 10 10:45 | 1 comment | Share

If you’re thinking about stock fraud, you don’t want to do it in the US where the SEC has both prosecutorial power and a desire to exercise it.

One other point to consider from the SEC’s latest prosecution: it is possible to pursue individual auditors for missing signs of fraud they should have caught, without destroying the audit firm in a repeat of the Arthur Andersen collapse.

Washington D.C., Sept. 9, 2015 — The Securities and Exchange Commission today charged national audit firm BDO USA with dismissing red flags and issuing false and misleading unqualified audit opinions about the financial statements of staffing services company General Employment Enterprises. Continue reading

Adviser on Chinese Reverse Mergers Is Charged in a Securities Fraud Case; Federal prosecutors call him something else: a “master of manipulation” who reaped tens of millions of dollars in illegal profits

http://www.nytimes.com/2015/09/11/business/dealbook/adviser-on-chinese-reverse-mergers-charged-with-fraud.html?emc=edit_dlbkpm_20150910&nl=business&nlid=36114517&_r=0

Adviser on Chinese Reverse Mergers Is Charged in a Securities Fraud Case

By ALEXANDRA STEVENSONSEPT. 10, 2015

Benjamin Wey has described himself as a “leading Wall Street American financier” who helped Chinese companies sell shares in the United States. Federal prosecutors call him something else: a “master of manipulation” who reaped tens of millions of dollars in illegal profits. The F.B.I. arrested Mr. Wey at his Manhattan home on Thursday and charged him with securities fraud, wire fraud, conspiracy and money laundering in an eight-count indictment unsealed in a federal court in Manhattan. Continue reading

SEC can pursue insider trading case against brokers: judge

http://www.reuters.com/article/2015/09/11/us-usa-insidertrading-sec-idUSKCN0RB1Z820150911

Fri Sep 11, 2015 4:23pm EDT

SEC can pursue insider trading case against brokers: judge

NEW YORK | BY JOSEPH AX

Two New York stockbrokers must face civil insider trading charges brought by U.S. securities regulators, a U.S. judge ruled on Friday, despite a landmark appellate ruling that torpedoed the criminal case against them. Continue reading