China Sky Legal Resolution: Is a fine of $10m fine and 10% shareholding a commensurate sentence? 

Posted by Eugene SAY Gui Hua, Year 4 undergrad at the School of Business, Singapore Management University

In a first negotiated deal of it’s kind, former CEO of China SKy, Mr. Huang Zhong Xuan was ordered to pay a civil penalty of S$2.5million and surrender 10% of his shareholdings in China Sky. The lead up to this verdict involved Mr. Huang attempting to transfer US$10m out of his private banking account at the brink of the lawsuit and subsequently refusing to appear in Court.  Continue reading →

http://www.scmp.com/print/news/china/article/1710383/chinas-peoples-liberation-army-audits-spending-bid-root-out-crime

China’s People’s Liberation Army audits spending in bid to root out crime

Thursday, 12 February, 2015, 12:32am

Angela Meng angela.meng@scmp.com

The review, part of Xi’s anti-waste crackdown, will look into expenditure over past two years

The People’s Liberation Army is launching a year-long retrospective audit to review military spending over the past two years to crack down on excessive behaviour in the world’s largest army. Army mouthpiece PLA Daily yesterday said the audit would focus on four things: pay orders of all military fund flows, schedules of disbursement, management of internal service venues, and details of spending for extra-budgetary funds. The report, which was on the daily’s front page, said the move was aimed at uncovering embezzlement, accounting fraud, stealing from private coffers and other wrongdoing so as to curb “deep-seated, unhealthy” tendencies in the military. Continue reading →

http://www.forbes.com/sites/ceibs/2015/02/11/ceos-on-the-run-financial-crisis-with-chinese-characteristics/print/

2/11/2015 @ 4:37AM 336 views

CEOs On The Run: Financial Crisis With Chinese Characteristics

 China Europe International Business School , Contributor

POST WRITTEN BYSeung Ho Park and Shaomin Li

As China’s economy slows down, many firms cannot service their debt obligations . This isn’t abnormal, but what is unusual is that, faced with debt issues, there has been an increasing number of CEOs and owners of borrowing companies who simply choose to disappear . The local media have coined a new term to describe these vanishing acts: paolu  (running on the road). Continue reading →

http://www.accountingtoday.com/news/liability-insurance/sec-claws-back-money-from-tech-cfos-for-accounting-fraud-73619-1.html

SEC Claws Back Money from Tech CFOs for Accounting Fraud

SAN FRANCISCO (FEBRUARY 10, 2015)

BY MICHAEL COHN

Two former CFOs of a Silicon Valley technology company have agreed to return nearly a half-million dollars in bonuses and stock sale profits they received while their company was committing accounting fraud, in a settlement with the Securities and Exchange Commission. William Slater and Peter E. Williams III received $337,375 and $141,992 respectively during time periods when Saba Software presented materially false and misleading financial statements, according to the SEC. Continue reading →

http://www.businesstimes.com.sg/transport/ow-bunker-fallout-could-lead-to-exit-of-opet-spore

OW Bunker fallout could lead to exit of Opet S’pore

Platts says S’pore unit closing off positions and settling oustanding payments

Malminderjit Singhmsingh@sph.com.sg@MalminderjitBT

11 Feb5:50 AM

THE fallout from the OW Bunker scandal is far from over.

Bunker provider Opet Trade (Singapore) will reportedly soon exit the industry as a result of its large exposure to the Danish marine fuel supplier, which collapsed last November after allegations of fraud hit its Singapore subsidiary, OW Bunker Far East. Continue reading →

Around this time, we found an obscure company called HQ Sustainable Maritime Industries (HQS), a company headquartered in Seattle with its primary operations in China. HQS was a vertically integrated tilapia producer and specialty healthcare product manufacturer. This time period was before the fraud prevalent in Chinese companies trading on western exchanges came to light. Unlike those frauds, however, HQS was headquartered in Seattle, had Canadian leadership, and was audited by a Canadian firm that was itself under the supervision of the SEC’s audit and accounting regulator, the Public Company Accounting Oversight Board (“PCAOB”). The PCAOB had thoroughly reviewed and approved this Canadian audit firm, giving us false comfort. We had spoken to the VP of Finance at HQS numerous times and even called the auditor to verify that they conducted appropriate audit procedures. Continue reading →

http://www.scmp.com/print/news/china/article/1708167/70-chinese-listed-firms-affected-far-reaching-anti-graft-campaign-so-far

Guangming Daily Reported at least 70 listed companies have corrupted officials. Many companies and enterprises have served as “money printers and automated teller machines” for corrupt officials. According to Hithink Royalflush Information Network, an online financial information site in Hangzhou, Zhejiang province, out of 70 problem-plagued companies, the largest group consists of 18 in industries such as oil, coal mining and nonferrous metals. Six of the 70 are in the real estate sector and another six are financial companies. Beijing News said listed companies in high-profit and monopoly industries bribe officials by giving them shares, manipulate stock prices and transfer benefits through mergers and acquisitions in the capital market. On Monday, China National Radio reported that the business department handling wine imports at China National Cereals, Oils and Foodstuffs Corp, the country’s largest oil and food importer, spent more than RMB200,000 on wine during a two-day party at a luxu ry hotel in Yunnan province

Seventy Chinese listed firms affected by far-reaching anti-graft campaign so far

Monday, 09 February, 2015, 2:28pm

Angela Mengangela.meng@scmp.com

These firms either lost their top executives or were forced to restructure because of the nationwide fight against corruption

Chinese media has compiled the names of listed companies that lost top executives or underwent restructuring as a result of the country’s far-reaching anti-corruption campaign.

Last year, some 70 listed companies were implicated in President Xi Jinping’s fight after graft, The Beijing Times reported. Many of these firms were under the control of friends of formerly powerful Communist Party officials, it said. Continue reading →

Will RBI’s new regulations be effective for bond market?

Abhirup Ghosh

9 February 2015

Moneylife

RBI’s new regulations on bond market prescribe settlement through clearing houses, allows inclusion of instruments issued by several agencies to bring more liquidity and the ‘haircut’ to help corporates to leverage more The Reserve Bank of India (RBI) on 3 February 2015 came out with a new set of regulations on the ready forward contracts on Corporate Debt Securitiesreplacing the old one of 2010. The new regulations are certainly looking better than the old one, but not sure of how effective will it be. There are three things that work for the new regulation. Firstly, unlike the earlier regulations, this one prescribes for settlement through the clearing houses of the three stock exchanges, BSE, NSE and MCX-Stock Exchange (MCX-SE).

This would reduce risk of malpractices adopted by the intermediaries, which is what happened in the Harshad Mehta scam. Continue reading →

http://www.scirp.org/journal/PaperDownload.aspx?paperID=30220

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

ABSTRACT
From Enron, WorldCom and Satyam, it appears that corporate accounting fraud is a major problem that is increasing both in its frequency and severity. Research evidence has shown that growing number of frauds have undermined the integrity of financial reports, contributed to substantial economic losses, and eroded investors’ confidence regarding the usefulness and reliability of financial statements. The increasing rate of white-collar crimes demands stiff penalties, exemplary punishments, and effective enforcement of law with the right spirit. An attempt is made to examine and analyze in-depth the Satyam Computer’s “creative-accounting” scandal, which brought to limelight the importance of “ethics and corporate governance” (CG). The fraud committed by the founders of Satyam in 2009, is a testament to the fact that “the science of conduct is swayed in large by human greed, ambition, and hunger for power, money, fame and glory”. Unlike Enron, which sank due to “agency” problem, Satyam was brought to its knee due to ‘tunneling’ effect. The Satyam scandal highlights the importance of securities laws and CG in ‘emerging’ markets. Indeed, Satyam fraud “spurred the government of India to tighten the CG norms to prevent recurrence of similar frauds in future”. Thus, major financial reporting frauds need to be studied for “lessons-learned” and “strategies-to-follow” to reduce the incidents of such frauds in the future.

http://www.theregister.co.uk/2014/05/14/theorums_1_benford/

Posted by Ida Inu YATI, Year 3 undergrad at the School of Accountancy, Singapore Management University

Big Data’s Big 5 Yes, we’ve been hit over the head enough times with the phrase “big data” to be aware of its presence, even though we’ve been up to our armpits in streams of huge unstructured datasets for years.

Those of you who are analysts or data scientists will have already picked up a set of tools that help you find hidden information buried deep in the data. Those tools may be languages (for example R), statistical tests (t-test, Analysis of Variance) and/or data mining techniques (clustering). Continue reading →