http://www.nbcnews.com/news/world/vietnam-tycoon-nguyen-duc-kien-jailed-30-years-over-fraud-n126001

Posted by Joel CHUA Yong Sheng, Year 3 undergrad at the School of Business, Singapore Management University

Vietnam Tycoon Nguyen Duc Kien Jailed for 30 Years Over Fraud

HANOI, June 9 – A Vietnamese court jailed a tycoon and former banker for 30 years on Monday for his part in a series of elaborate financial scams worth $1.1 billion that have become one of the country’s most high-profile banking scandals.

Nguyen Duc Kien, 50, founder of Asia Commercial Bank , one of Vietnam’s largest private lenders, was found guilty of a litany of crimes along with seven co-conspirators who used “sophisticated and cunning tricks” to deprive depositors and companies of hundreds of millions of dollars. Continue reading →

Click to access LeeXiao.pdf

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

Chi-Wen Jevons Lee, Xing Xiao (November 2004)

Abstract：
Numerous findings in the literature suggest that paying cash dividend mitigates agency problem
between majority shareholders and minority shareholders. Many common law countries require
mandatory cash dividend policy to protect minority shareholder’s interest. This paper provides
opposite evidence. We find that state dominant firms in China have high propensity to pay cash
dividend but low propensity to subscribe rights offering. Furthermore, state dominant firms often
increase cash dividend payment soon after rights offerings. Continue reading →

http://www.thestar.com.my/Business/Business-News/2015/01/31/Public-consultation-should-be-more-transparent/?style=biz

Bursa Malaysia proposal on RPT advice is dropped without explanation

Saturday, 31 January 2015

BY: ERROL OH

SHOULDN’T we at least feel a bit nervous when there’s a loosening of the rules on related-party transactions (RPTs) involving listed companies? Can we afford to be more relaxed about the possibility of those controlling a company coming up with deals that hurt the interests of other shareholders?

The Organisation for Economic Co-operation and Development (OECD) once called abusive RPTs as “one of the biggest corporate governance challenges facing the Asian business landscape”. That was in a September 2009 report. Could it be that things are different now? Continue reading →

http://www.economist.com/news/business/21606838-company-accounts-detectives-collar-another-suspect-got-em-gotham

Posted by KOH Ngiap Hao , Year 4 undergrad at the School of Accountancy, Singapore Management University

The company-accounts detectives collar another suspect

JENARO GARCÍA was an eloquent cheerleader for Gowex, helping to propel the Spanish Wi-Fi firm to European startup stardom. When investors asked detailed financial questions of its founder and boss, however, he would clam up. Short-sellers, who bet against companies by selling borrowed shares, in the hope of buying them back more cheaply later, began to act on this reticence early this year. But the killer blow was a report by an opaque outfit called Gotham City Research, alleging that Gowex had far fewer wireless hotspots than it claimed and that 90% of its sales were bogus. On July 6th, five days after the report’s publication, the firm said it would file for bankruptcy and that Mr García (pictured) had resigned after admitting to fiddling the accounts for at least four years. Continue reading →

http://www.economist.com/node/21529101

Posted by YEO Wei Lin, Year 3 undergrad at the School of Accountancy, Singapore Management University

THE directors of Yahoo! were “so spooked by being cast as the worst board in the country” that they fired Carol Bartz as chief executive “to show that they’re not the doofuses that they are.” That was Ms Bartz’s typically blunt verdict, offered to Fortuneafter she was dismissed with a phone call by the internet firm’s chairman, Roy Bostock, on September 6th. Continue reading →

https://contrarianvalueedge.wordpress.com/2015/01/30/what-long-term-investors-can-should-learn-from-short-sellers/

What Long Term Investors Can and SHOULD LEARN From Short Sellers

Posted on January 30, 2015by Anil Tulsiram

Note: Unless otherwise stated, entire text in this blog post is from two books 1) Art of Value Investing 2) Art of Short Selling . David Einhorn quotes are from his book Fooling Some of The People All the Time. My comments are in italics. 

Let me make it clear at the outset that I had never done short selling nor do I plan to do in future. But I found principles of short selling technique to be equally helpful to long-term investors. For short sellers the maximum upside is 100% whereas downside is UNLIMITED. These asymmetrical returns force short sellers to be much more diligent and conservative compared to long only investors. I was surprised to note that most successful short sellers NEVER SHORT ANY STOCK MERELY ON OVER-VALUATION. I am not talking here about short sellers who short a stock in the morning and cover their position by the end of the day.  I am talking about short sellers, who after deep analysis create a position and hold on to it until their conviction pays off. 

Charlie Munger once said, ‘All I ever want to know is where I’m going to die, so I never go there’. My sole attempt at studying short selling technique is to find what successful short sellers look for in a good short and to avoid such stocks. 

Continue reading →

http://www.fraud-magazine.com/article.aspx?id=4294968847

http://www.btinvest.com.sg/personal_finance/young-investors-forum/can-auditors-be-trusted-to-detect-fraud/

Posted by Latha Do NADARAJAN, Year 3 undergrad at the School of Accountancy, Singapore Management University

Imagine an external auditor in this situation. In the course of a financial statement audit, unequivocal evidence of a fraud is uncovered. The auditor confronts the client with evidence; the client admits to the fraud and agrees to make the requisite adjustments in the firm’s financial statements. The auditor also notifies the client’s audit committee of the fraud. However, the committee comes to the decision that no further action is necessary. Continue reading →

http://blogs.wsj.com/moneybeat/2015/01/30/dealpolitik-alibabas-ipo-warnings-ring-true-with-fake-goods-dustup/

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

Alibaba Group Holding Ltd. investors got a taste this week of why investing in Chinese businesses can be fraught no matter how large or blue chip the company is. Although the e-commerce giant, in my view, appears to be on solid legal ground with the disclosures it made to investors ahead of its IPO in September about its challenges with fake goods, the skirmish shows there are limits on how much investors can really know about Alibaba or any public company relying heavily on Chinese operations. Continue reading →

http://www.accaglobal.com/sg/en/discover/ab-articles/business-law/fraud-board.html

Posted by M Laavanya, Year 3 undergrad at the School of Accountancy, Singapore Management University

FRAUD IN THE BOARD

Sacked by Olympus for his stand against financial corruption, ex-CEO Michael Woodford describes what happened when he blew the whistle

This article was first published in the January 2013 International edition of Accounting and Business magazine.

With three decades working for a Japanese camera giant under your belt, you are rewarded for leading the growth of the European arm with promotion to company president – the first non-Japanese national ever to hold the post. The fact your new role starts on April Fool’s Day does not seem an omen. Continue reading →

http://www.bloombergview.com/articles/2015-01-29/penny-stock-pawnbroker-had-a-clever-trick-to-get-paid

Penny Stock Pawnbroker Had a Clever Trick to Get Paid

JAN 29, 2015 5:55 PM EST

By Matt Levine

A sign of a good scam is that it’s hard to tell who’s being scammed. So here is a charming little story about International Capital Group, which agreed to pay $4.3 million to the Securities and Exchange Commission to settle charges of penny-stock misbehavior. ICG basically ran a pawn shop for penny stocks. Lots of founders/promoters/chief executive officers of tiny public companies own lots of stock in their companies, and not much else. And some of them would like to turn that stock into money.

But controlling insiders can’t sell their stock without registering the sales with the SEC. This requires things like, you know, audited financial statements, which can be a problem if you’re a tiny company with dubious financials. Even more important, registration also means disclosure. And when the founder and chief executive officer and majority shareholder of a tiny company publicly announces that he’s dumping all his stock, that … tends to push the stock price down. The trick is to get money for your stock without telling anyone that you’re selling

Continue reading →