Companies

Open Letter to SGX/MAS: Reply to CFO of SGX-Listed China Environment (CENV SP) on report “Potential Accounting Tunneling Fraud at China Environment?” – Address the accounting and governance concerns in an SGX/MAS announcement

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Related posts: (1) China Environment: Auditor Emphasis of Matter raises more questions on potential accounting tunneling risk; (2) CFO reply: https://asianextractor.com/2015/02/10/potential-accounting-tunneling-fraud-at-china-environment/#comment-785 (3) Does Auditor Explanatory Language in Unqualified Audit Reports Indicate Increased Financial Misstatement Risk? “Emphasis of matter” language predicts restatements

Dear Mr Chiar,

Thank you for your reply addressing part of the corporate governance and accounting issues that were raised in Part 1 of the three-part article series that was based on the financial statements audited by Baker Tilly TFW LLP. We note that Baker Tilly did not disclose the name of its local auditor partners in the subcontract work for the wholly-owned subsidiaries Fujian Dongyuan 福建东源环保 and Anhui Dongyuan (Footnote 13) with the carrying value of RMB673.5m in FY14 (FY13: RMB698.7m), which form a very substantial part of the asset value of the group. We also note that Baker Tilly was recently fined in Dec 2014 by the U.S. SEC over audit failures tied to a mainland company suspected of fraud involving undisclosed related-party transactions; the audit failure was a result of subcontracting the audit work to a local partner. Continue reading →

Noble’s Iceberg Rebuttal Gets Few Prizes for Transparency

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http://www.wsj.com/articles/noble-gets-few-prizes-for-transparency-1425643834

Noble’s Iceberg Rebuttal Gets Few Prizes for Transparency

ABHEEK BHATTACHARYA

March 6, 2015 7:10 a.m. ET

One of Asia’s largest commodities-trading houses is trying to convince investors that its accounting is transparent. The whole exchange offers a reminder, though, that the very business of trading commodities is opaque. Singapore-listed Noble Group late Thursday issued a rebuttal of claims by Iceberg Research, a little-known entity that has published two reports since mid-February questioning Noble’s accounting. It is impressive that Noble responded just a week after Iceberg’s second report, perhaps one reason its shares rose 5% Friday.

Yet the stock still is down some 12% since Iceberg’s first report came out. Speed aside, Noble’s response left some questions unanswered.

Iceberg’s first allegation was that Noble carried the stake it held in Australia-listed coal miner Yancoal at $678 million on its books at the end of 2013, when the market value was a fraction of that. Noble partly addressed this issue by writing down the asset to $322 million last week. That write-down seems too little, though, considering the market value currently stands at only $8 million. Noble classifies the miner as an “associate” despite holding a stake of just 13%, and values it through its own projections of what Yancoal’s cash flows will be. Noble suggests the market price of Yancoal matters less, since it is a thinly traded stock. Even so, at least investors can plainly see that price in contrast to Noble’s in-house projections. Continue reading →

Iceberg’s Comments on Noble Group’s FY2014 Results and Noble’s Rebuttals

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Comments on FY2014 results and Noble’s rebuttals

http://www.wsj.com/articles/research-group-responds-to-nobles-rebuttal-1425607510

Posted by John SOH Yong Ye, Year 4 undergrad at the School of Economics, Singapore Management University

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Changjiang Fertilizer chairman’s leave of absence and where the all-important legal seals were held prompt queries; Firm ‘unable to take a view’ whether chairman’s ‘personal matters’ will affect his character and integrity as a director

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http://www.businesstimes.com.sg/companies-markets/changjiang-fertilizer-chairmans-leave-of-absence-prompts-queries

Posted by John SOH Yong Ye, Year 4 undergrad at the School of Economics, Singapore Management University

Changjiang Fertilizer chairman’s leave of absence prompts queries

Jamie Lee

5 March 2015

Business Times Singapore

Firm ‘unable to take a view’ whether chairman’s ‘personal matters’ will affect his character and integrity as a director

CHANGJIANG Fertilizer Holdings – which shut down production for all of last year – on Wednesday announced that it has been queried by the Singapore Exchange (SGX) over the leave of absence taken by its executive chairman, Cai Jian Hua. The concerns, as put forth in the regulatory announcement, related to the details behind the “personal matters” that led to his six-month leave, and where the all-important legal seals were held. Continue reading →

Embattled ASX-listed education company Vocation crashes to $273m loss, audit problems flagged

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http://www.smh.com.au/national/education/vocation-crashes-to-273m-loss-audit-problems-flagged-20150302-13s95f.html?skin=text-only

Earlier post: Vocation chief Mark Hutchinson ‘should have been axed earlier’ after a damning audit review into the quality and practices of two of its businesses and the aggressive revenue recognition practices; How hedge funds predicted Vocation’s collapse

Vocation crashes to $273m loss, audit problems flagged

Date: March 02 2015
Simon Evans

Embattled education company Vocation crashed to a $273 million loss for the first half of 2014-15 because of heavy write-downs and fewer enrolments due to its battered reputation over the quality of some of its courses. The company has made extra provisions for the outcomes of regulatory audits which are pending in another business, outside those which were in the spotlight late in 2014 and which have already caused serious damage to the company. Vocation announced on Monday it had suffered a $273 million bottom-line loss for the six months ended December 31, 2014, compared with a loss of $4 million for the same time last year. Continue reading →

IBM Corp was sued by a shareholder that said it committed securities fraud by failing to write down a money-losing semiconductor unit before agreeing to pay another company $1.5 billion to take that unit off its hands

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http://www.reuters.com/article/2015/03/02/us-ibm-lawsuit-fraud-idUSKBN0LY2JC20150302

IBM shareholder sues company, alleging it overvalued chip unit

5:38pm EST

By Jonathan Stempel

NEW YORK (Reuters) – IBM Corp was sued on Monday by a shareholder that said it committed securities fraud by failing to write down a money-losing semiconductor unit before agreeing to pay another company $1.5 billion to take that unit off its hands. The lawsuit filed in Manhattan federal court arose from IBM’s announcement last Oct. 20 that it would sell the unit to GlobalFoundries Inc, and take a related $4.7 billion pre-tax charge. IBM also announced third-quarter results that day. Its share price fell 9 percent over the next two trading days, wiping out more than $18 billion of market value. Continue reading →

FELDA Global Ventures Holdings Bhd’s (FGV) ills go beyond accounting standards; under the rules of “fair value accounting”, the company is compelled to make provisions for its land lease agreement (LLA)

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http://www.thestar.com.my/Business/Business-News/2015/02/28/FGVs-ills-go-beyond-accounting-standards/?style=biz

FGV’s ills go beyond accounting standards

Saturday, 28 February 2015

FELDA Global Ventures Holdings Bhd’s (FGV) worst enemy is turning out to be the new accounting standards, so say the top executives of the plantation giant that draws more attention for its political prowess than commercial interest. But is this really the case, or is the suffering of the plantation company now due to the lack of medication and care rendered to the plantation assets and related investments when it was under Felda? And is it because FGV is viewed as a political entity rather than a listed company?

Right from the beginning, FGV was a tricky listing proposition because it had some elements that would not have gone down well by normal commercial standards. An example is the age profile of its trees, which is 20 years and above that forms some 50% of its total plantation assets. Continue reading →

Noble’s shock Q4 loss: Why no warning?

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http://www.businesstimes.com.sg/opinion/nobles-shock-q4-loss-why-no-warning

Noble’s shock Q4 loss: Why no warning?

R Sivanithy

2 March 2015

Business Times Singapore

WHEN the share price of commodities firm Noble Group stabilised very shortly after a selloff following the release of a report by short seller Iceberg Research a fortnight ago which attacked Noble’s accounting practices, the market had high hopes that Iceberg’s criticisms would be easily dismissed and the attack quickly repelled. Continue reading →

Noble says Iceberg author a former staff; group posts US$240m Q4 loss, missing by far the average estimate of US$470.6 million by 13 analysts; Noble had written off US$438m for the year, including a US$200m charge for Yancoal Australia, the valuation for which had been criticised by Iceberg

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http://www.businesstimes.com.sg/stocks/noble-says-iceberg-author-a-former-staff-group-posts-us240m-q4-loss

Noble says Iceberg author a former staff; group posts US$240m Q4 loss

Andrea Sohsandrea@sph.com.sg@AndreaSohBT

27 Feb5:50 AM

Singapore

NOBLE Group has fingered a former employee as the person behind Iceberg Research, as it reported on Thursday its first quarterly loss in three years due to a heavy impairment charge on an associate. Continue reading →