Leighton covered up project blowouts, claims executive
February 17, 2015 – 12:15AM
Nick McKenzie, Richard Baker, Jenny Wiggins
Giant Australian construction firm Leighton Holdings faces courtroom accusations it concealed a financial black-hole worth up to $4 billion from shareholders, potentially breaching continuous disclosure laws. Continue reading
http://www.ft.com/intl/cms/s/0/1c58d404-b3d2-11e4-a6c1-00144feab7de.html#axzz3RpYTLXrq
Posted by YEO Wei Lin, Year 3 undergrad at the School of Accountancy, Singapore Management University
Last updated: February 14, 2015 12:23 am
SEC seeks information from Alibaba
By Gina Chon in Washington
The US Securities and Exchange Commission has asked the Alibaba Group for information about its dealings with a Chinese regulator, which criticised the ecommerce company for inadequately policing its merchants for counterfeit goods. Continue reading
http://www.koreatimes.co.kr/www/news/biz/2015/02/123_173586.html
Updated : 2015-02-13 20:04
GS builder faces class action lawsuit
By Kim Jae-won
GS E&C faces a class action suit for losses a group of individual investors suffered as the result of allegedly deceptive notices made through the stock market. The Seoul Central District Court said Friday that it accepted a petition by 15 investors against the construction unit of GS Group for losses inflicted on some 10,000 individual stock investors due to the company’s purported false public notices with the Korea Exchange. Continue reading
http://www.moneylife.in/article/stock-manipulation-midas-infra-trade/40355.html
Stock manipulation: Midas Infra Trade
5 February 2015
Moneylife
Midas Infra Trade gained a stupendous 1104% in 18 months, with almost no income
Midas Infra Trade Ltd (MITL) is supposedly in the business of ‘share trading’. Prior to April 2014, MITL was known as Associated Finlease Ltd. It is a dormant company. It reports marginal income from its trading activities. With almost nil net profits, in an 18-month period, the stock of MITL gained a stupendous 1104%—from Rs0.95 on 23 May 2013 to Rs11.44 on 5 November 2014. Since then, the stock price has fallen 46% to Rs6.15 on 23 January 2015. Over this period, the promoters have been reducing their stake. In just a year, they have reduced their stake to 0.35% on September 2014 from 8.85% in September 2013. This suspicious activity did not raise a red flag, despite the regulator and the Exchanges being aware of MITL’s mismanagement in the past. In 2000, MITL’s certificate of registration as a non-banking finance company was rejected by the Reserve Bank of India (RBI) and it was prohibited from accepting deposits. Yet, in 2010, MITL collected money from public through money circulation schemes by making tall promises of high returns. Though this led to a cautionary notice from RBI, no penal action was taken against the company. MITL has also been suspended in the past for not complying with the listing agreement. No wonder, investors are so suspicious of the stock market and have little respect for the regulators.
http://www.ft.com/intl/cms/s/0/9b70a976-8f8a-11e0-954d-00144feab49a.html#axzz3RKU6E8m7
Posted by LIM Hui Jie, Year 4 undergrad at the School of Economics, Singapore Management University
Like any emerging market, China has its fair share of fraud, scams and corporate governance fiascos. But a spate of scandals at Chinese companies listed in New York, Hong Kong and Toronto is increasingly unsettling investors.
http://www.valuebuddies.com/thread-1706.html
Posted by CHEN Liting, Year 3 undergrad at the School of Accountancy, Singapore Management University
Business Times – 28 Dec 2011
THREE years of investigations have uncovered several financial and accounting irregularities at FibreChem Technologies, including an unauthorised share transfer and HK$777 million (about S$130 million) in missing cash.
Distressed Company Watch List; See which companies have recently indicated doubt about continuing as going concerns in SEC filings
By Allison Collins, 3 February 2015
Companies Description
ACL Semiconductors Inc. Hong Kong-based ACL Semiconductors Inc. manufactures dynamic random access memory products for computers, digital cameras and other products
ADGS Advisory Inc. ADGS is a Hong Kong-based accounting and advisory firm
Amaru Inc. Amaru, headquartered in Singapore, provides interactive entertainment on demand through its subsidiaries
American Nano Silicon Technologies Inc. American Nano is a Sichuan, China-based nano-technology chemical manufacturer
China Ginseng Holdings Inc. Changchun City, China-based China Ginseng farms, processes and distributes ginseng
China Shianyun Group Corp. Ltd. China Shianyun, headquartered in Shenzhen, China, makes and sells consumer goods, including teas, liquors, meal replacement products, eggs and cured meats
China Teletech Holding Inc. Tallahassee, Fla.-based China Teletech provides telecommunications services in China
Cleantech Innovations Inc. China-based Cleantech Innovations manufactures structural towers for wind turbines
Comjoyful International Co. Beijing, China-based Comjoyful is a holding company
Cord Blood America Inc. Cord Blood, headquartered in Las Vegas, provides private cord blood and cord tissue stem cell storage
Fuwei Films (Holdings) Co. Ltd. Weifang Shandong, China-based Fuwei makes plastic film used for packaging and other uses
Leo Motors Inc. Leo Motors is a Korean company that manufactures electric vehicles
Network CN Inc. Hong Kong-based Network CN is an advertising company
Suwin Stevia International Inc. Shandong, China-based Sunwin sells stevioside, a natural sweetener, and herbs used in Chinese medicines and veterinary products
Tongji Healthcare Group Inc. Guangxi, China-based Tongji Healthcare operates a hospital in China
Usmart Mobile Device Inc. Kowloon, Hong Kong-based Usmart makes memory technology products
Company Watch List has indicated in a filing with the U.S. Securities and Exchange Commission in the previous 12 months doubt about its ability to continue as a going concern. A company can be removed from the list if it is acquired, if it files for bankruptcy protection or if it indicates a change in status.
Earnings Manipulation in Failing Firms
ROSNER, REBECCA L.1
Contemporary Accounting Research. Summer2003, Vol. 20 Issue 2, p361-408. 48p. 2 Diagrams, 10 Charts.
Abstract:
Prior literature and anecdotal evidence, most recently provided by allegations relative to Enron, Global Crossing, and WorldCom, suggest that failing firms (defined here as prebankruptcy firms) may be motivated to engage in fraudulent financial reporting to conceal their distress. I examine two research questions: (1) Are failing firms’ prebankruptcy financial statements more likely to exhibit signs of material income increasing earnings manipulation than those of nonfailing firms? (2) Do auditors detect the overstatements in firms that they perceive to be failing? I predict and find that as (ex post) bankrupt firms that do not (ex ante) appear to be distressed approach bankruptcy, their financial statements reflect significantly greater material income-increasing accrual magnitudes in nongoing-concern years than do control firms. The accrual behavior of these firms resembles that of bankrupt firms that the Securities and Exchange Commission (SEC) has sanctioned for fraud. Like sanctioned firms, the nonstressed bankrupt firms display significantly greater (material) increases in receivables; inventory; property, plant, and equipment; sales; net working capital, current, and discretionary accruals in prebankruptcy nongoing-concern years than do control firms. They also display significantly more negative changes in cash flows from operations and net cash and a greater disparity between accrual-based net income and operating cash flows than do control firms, consistent with Lee, Ingram, and Howard 1999. Finally, I predict and find that these firms’ going-concern years reflect evidence consistent with auditor-prompted reversal of previous overstatements. These results are based on parametric and nonparametric tests for various subsample combinations drawn from a sample of 293 bankrupt firms representing approximately 2,500 observation
NVC Lighting says founder enters pledge deal without knowledge of board
Friday, 06 February, 2015, 4:53pm
Toh Han Shihhanshih.toh@scmp.com
NVC Lighting, one of China’s biggest lighting manufacturers, recently discovered its founder and former chief executive Wu Changjiang has made a pledge agreement of 23 million yuan (HK$29.2 million) without the knowledge of its board of directors, the Hong Kong-listed firm announced on Friday. “The board is not presently aware of a fair and reasonable justification for the purported entering into of the agreement, nor has the board been provided with a proper explanation by Mr. Wu which indicates that the agreement is in the interests of the company or its shareholders. The company is taking steps to obtain more details on the circumstances in which the agreement was entered into, and is obtaining legal advice to protect its interests,” said NVC.
Wu was dismissed last August 2014. Police in Huizhou formally registered a case of “money embezzlement by Wu and others” on October 22. NVC announced in November that hundreds of millions of yuan were withdrawn from the company’s bank accounts in Chongqing without the board’s permission in relation to loan pledges entered into by Wu. In December, mainland media reported that Wu was under criminal detention in Huizhou, Guangdong province. Wang Donglei, who is now chairman of NVC, had alleged that Wu embezzled about 400 million yuan from NVC’s bank accounts in the Chongqing branches of Industrial and Commercial Bank of China and China Minsheng Banking Corp, and an additional 173 million yuan from the Chongqing branch of Bank of China. Continue reading
http://www.sec.gov/litigation/litreleases/2014/lr23096.htm
Posted by CHEN Liting, Year 3 undergrad at the School of Accountancy, Singapore Management University
The Securities and Exchange Commission (“Commission”) filed a civil injunctive action today in the United States District Court for the District of Columbia charging China Valves Technology, Inc. (“China Valves”), its Chairman and former CEO, Siping Fang (“Fang”), its former CEO, Jianbao Wang (“Wang”), and its CFO, Renrui Tang (“Tang”), with misleading investors about the true nature and price of an acquisition and by mischaracterizing and materially overstating income related to its purchase and reverse engineering of a competitor’s product. Continue reading
AsianExtractor: Unearthing Accounting Fraud in Asia 