http://www.bloombergview.com/articles/2015-05-14/corporate-japan-answers-to-nobody
Corporate Japan Answers to Nobody
MAY 14, 2015 6:00 PM EDT
It’s been a dreadful week for Japanese corporations. Toshiba is facing questions about its accounting practices, Sharp is asking lenders for another bailout and Takata can’t escape bad news about its airbags. Continue reading
Don’t write off write-offs: Bad news often reflects past overoptimism
May 16th 2015
WHEN big companies announce write-offs, they tend not to do things by halves. Back in 2008 AIG, an insurance group rescued by the American government, reported an annual loss of $99 billion, with almost $62 billion of that occurring in a single quarter. In 2001 JDS Uniphase, an optical-equipment maker, chalked up a deficit of $56 billion.
Such losses are so big they can seem almost unreal. That can serve a dual purpose. First, the deficit can be dismissed as the product of “mere accounting”, the result of pedantic number-crunching. Assets have been written down in value, but that is not the same as a cash loss. Second, when new managers are appointed, a huge loss can be blamed on the previous regime. All the bad news can be revealed at once, a phenomenon known as “kitchen-sinking”. From that point on, the only direction for profits must be up. Continue reading
FT Alphaville | May 14 07:18 | 1 comment | Share
By Jennifer Hughes in Hong Kong
Seven weeks of silence. That’s what investors in Tianhe Chemicals have had since the short target said it needed to give its auditors more information and would delay publishing its 2014 results. Thursday marks exactly seven weeks since it made the announcement and suspended its shares at the same time, highlighting one of the less fun aspects of the Hong Kong market – the risk of getting trapped.
A recap:The Chinese speciality chemicals group became a Hong Kong market darling after it listed last June, gaining more than a third between the float and the moment it was attacked by Anonymous Analytics just over two months later. The now standard attack- denial-more attack-lengthy rebuttal process followed. Tianhe vigorously rejected AA’s claims that it had generated a fraction of the sales and profits it had reported. Continue reading
http://www.bloomberg.com/news/articles/2015-05-14/wesley-clark-penny-stock-general
Wesley Clark: The Penny-Stock General
The retired four-star general lends his name to some sketchy companies
May 14, 2015
Sixteen years ago, Wesley Clark was the four-star U.S. Army general running the Kosovo war. These days, he’s been pitching food-truck franchises to military veterans and helping a convicted felon raise money to grow hydroponic lettuce. “We’d love it if you joined with us in an investment,” the silver-haired Clark, 70, says in a promotional video for a company called the Grilled Cheese Truck. He’s pictured standing in front of a statue of a bald eagle in a replica of the Oval Office. “We’re going to be one of the fastest-growing young companies in America.”
The grilled cheese venture is losing money and hasn’t signed any veterans as franchisees, and the lettuce operation is being sued for failing to pay its bills. They’re just two of a dozen precarious ventures with which Clark has been associated since he retired from the Army with the self-proclaimed goal—a joke, he says now—of making $40 million.
Clark is one of many former governors, generals, and congressmen who’ve found second careers lending their name to tiny companies that are willing to pay for prestige. Since he ran for president in 2004, Clark has joined the boards of at least 18 public companies, 10 of them penny-stock outfits, whose shares trade in the “over the counter” markets, a corner of Wall Street where fraud and manipulation are common. Continue reading
http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=156921&sid=44443103&con_type=1
Small caps plunge on SFC market probe rumors
Imogene Wong
Tuesday, May 12, 2015
Shares of small-cap companies including Yan Tat Group Holdings (1480) and Jicheng Umbrella Holdings (1027) tumbled yesterday as reports emerged that regulators were probing abnormal gains in the stocks. Yan Tat – a mainland-based manufacturer of printed circuit boards with a market capitalization of about HK$2.2 billion – dived nearly 50 percent to HK$9.10 yesterday. It soared to as much as HK$102 on Friday and then falling to HK$17.44 on the same day. It was listed in December. Another newly listed firm, Fujian- based Jicheng Umbrella, surged from its debut price of HK$1.10 in February to hit HK$13 yesterday – but that was down 18.2 percent from Friday after it announced a share split. Continue reading
Pledging shares by promoters increases risks
Share pledging can raise a red flag if done for personal reasons such as buying property
Ashley Coutinho | Mumbai
May 11, 2015 Last Updated at 12:30 IST
Last year, shares of Bhushan Steel took a beating after its lenders invoked nearly 14 million pledged shares held by the company’s promoters. Pledging of shares by promoters can be a cause for concern especially when the market is going through uncertain times. Continue reading
http://www.hindustantimes.com/analysis/who-looks-after-the-minority-investor/article1-1345285.aspx
Who looks after the minority investor?
J Mulraj
8 May 2015
Hindustan Times
India, May 8 — Stock Exchanges in India used to be self regulatory organisations (SROs) earlier. After being hit by the scandals of Harshad Mehta, and then of Ketan Parikh, the Government decided that self regulation was not working, and set up SEBI as a regulator. Thereafter, due to some stellar work by SEBI, there has not been any major crisis in stock markets. A scandal has erupted, though, in a commodity exchange, NSEL, due to a lack of proper oversight by the regulator FMO, (or by the absence of adequate power given to FMO to regulate it) and also by the inexplicable latitude given to NSEL by the then Ministry of Corporate Affairs in granting exemptions. NSEL await justice for an outright fraud and the delay by the Government is inexplicable, and dissuades investors.
The danger to minority investors, globally, now comes more from corporate scandals, and it is here that the question in the title needs to be answered. Continue reading
Origins of Chinese Bond Default Buried in Accounting Footnotes
byLisa PhamMichelle YunLianting Tu
May 6, 2015
Investors still wondering how Kaisa Group Holdings Ltd. doubled its debt in six months and triggered China’s first property bond default may want to read page 63 of its 2014 interim report.
There, in footnote No. 15 of the Shenzhen-based company’s balance sheet, is a reference to 11 billion yuan ($1.8 billion) in advance deposits for property projects from third parties and for 1.15 billion yuan that needed to be refunded.
At issue is whether these deposits were initially classified properly as current liabilities on Kaisa’s books. Analysts at Lucror Analytics Pte, Mitsubishi UFJ Securities HK Ltd. and BDO Ltd. say the payments have characteristics of interest-bearing debt, and booking them the way Kaisa did may have made metrics that investors use to assess a company’s riskiness appear stronger than they actually were. Continue reading
http://www.pressreader.com/singapore/the-straits-times/20150505/282415577845006/TextView
Firms act to meet new 20-cent rule
Grace Leong
5 May 2015
The Straits Times
Over one in 5 SGX counters trading below that amount consolidating their shares
MORE than a fifth of an estimated 250 mainboard-listed stocks trading below 20 cents have proposed consolidations to comply with the Singapore Exchange’s new rule aimed at curbing speculation and market manipulation here.
Introduced on March 2, the new Minimum Trading Price (MTP) rule of 20 cents a share takes effect on March 1 next year. The year’s grace period gives firms time to get their six-month average share price above 20 cents. Continue reading
http://www.ft.com/intl/cms/s/0/b95b2bc0-f019-11e4-aee0-00144feab7de.html#axzz3ZEfsGRpt
May 4, 2015 11:28 am
Exchanges urged to do more to oust tricksters
Philip Stafford in London and Gregory Meyer in New York
The renowned freewheeling and aggressive environment of futures trading is now firmly under the microscope with the industry keen to show it can still police itself. The arrest of UK trader Navinder Singh Sarao for four years of alleged market manipulation of equity futures has shone a fierce spotlight on the dubious trading practices known as spoofing and layering, and done little to improve the reputation of markets.
The crackdown was reinforced last Thursday by the 60-day banning of two traders from the United Arab Emirates on the Chicago Mercantile Exchange for alleged gold futures manipulation. Now traders are being reminded of the need to not only have adequate financial resources, but also exhibit “good moral character, a good reputation and business integrity,” as the CME’s rules state. Continue reading
AsianExtractor: Unearthing Accounting Fraud in Asia 