Bleak restart for Chaoda Modern shares
Tuesday, February 03, 2015
Shares of Chaoda Modern Agriculture (0682) slumped 45.45 percent to HK$0.60 yesterday after it resumed trading after being suspended for more than three years.The stock had a turnover of HK$241.39 million. The Fujian-based food maker said it lost HK$1.94 billion in the year ended June 30 of 2014, much less than the HK$3.22 billion lost in 2013. Annual revenue fell 36.05 percent to HK$1.46 billion. It expects to record 20 to 30 percent of year-on-year loss for the six months ended December 31 of 2014, due to low demand for the products and the writing off of prepaid premium for certain land leases. On September 26 of 2011, the financial secretary said the government was investigating its chairman Kwok Ho, chief financial officer Andy Chan Chi-po and another individual on market misconduct, including insider trading. At the same time, research firm Anonymous Analytics published a 38-page report alleging Chaoda’s management transferred US$400 million (HK$3.12 billion) capital from the firm through exaggerating the capital expenses or forging transaction records. The firm did not fight back against the accusation until July 2013, saying that the allegations were untrue. JENNIFER LI
Would You Still Buy Alibaba If It Were Two-Thirds Smaller? If 80% of Taobao’s products are fake, illegal, or substandard, look for that site’s gross merchandise volume-the metric Alibaba uses-to shrink by a large percentage
Gordon G. ChangContributor
WORLD AFFAIRS 2/01/2015 @ 3:22PM 52,877 views
Would You Still Buy Alibaba If It Were Two-Thirds Smaller?
On Friday, the State Administration for Industry & Commerce, through a spokesman, tried to minimize a damning report it had issued on Wednesday on Taobao Marketplace, one of the main sites of Hangzhou-based Alibaba Group. The Wednesday report created legal exposure for the Chinese Internet giant and, more significantly, highlights the ultimate unsustainability of its business model. Continue reading
Possible Class Action Suit Against Alibaba For Disclosure Failures in issuing materially false and misleading statements regarding the soundness of company’s business operations, the strength of its financial prospects and concealing substantial ongoing regulatory scrutiny
Possible Class Action Suit Against Alibaba For Disclosure Failures
February 2, 2015
Alibaba and its executives may feel the sting of American jurisprudence as law firms line up for possible class action lawsuits in the United States against the Chinese e-commerce company. At least five law firms so far have expressed intentions to commence class actions against Alibaba.
For example, a complaint from Robbins Geller Rudman & Dowd LLP charges Alibaba and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the class period, Defendants issued materially false and misleading statements regarding the soundness of company’s business operations, the strength of its financial prospects and concealing substantial ongoing regulatory scrutiny. Specifically, the complaint alleges that Alibaba failed to disclose that company executives had met with China’s State Administration of Industry and Commerce in July 2014, just two months before Alibaba’s initial public offering in the United States, and that regulators had then brought to Alibaba’s attention a variety of highly dubious — and possibly illegal — business practices such as the selling of counterfeit goods.
In the IPO, Alibaba and certain “selling shareholders” sold more than 368 million ADSs at USD68 each. The complaint alleges that selling shareholders included two of Alibaba’s co-founders, Jack Ma and Joseph Tsai, each of whom sold millions of shares. The complaint also alleges that Alibaba’s ADSs continued trading at ever-increasing, artificially inflated prices.
[Flashback] Finance minister cautions against window dressing by accountants
Posted by Latha Do NADARAJAN , Year 3 undergrad at the School of Accountancy, Singapore Management University
NEW DELHI: Finance minister Pranab Mukherjee has asked the country’s auditing fraternity to be vigilant against “window dressing” of financials by companies, and highlighted the need for stringent disclosure norms on complex financial instruments. Continue reading
[Flashback] Detect, Prevent, and Deter Fraud in Big Data Environments
Click to access combat-credit-card-fraud-with-big-data-whitepaper.pdf
Posted by Latha Do NADARAJAN , Year 3 undergrad at the School of Accountancy, Singapore Management University
Abstract: More than 50% of fraud cases are detected by accident, after loss has occurred. Many tools
require excessive effort by fraud analysts to generate useful information, or the tools generate
too many false alarms.The cost of using these tools is high, and the return is low.
For effective fraud management, you need an approach that detects and prevents fraud –
as it happens. The right solution will help your organization keep pace with ever-changing,
increasingly sophisticated criminal tactics. Then if fraud occurs, your analysts can investigate
it efficiently and thoroughly check transactions without negatively impacting operational productivity.
Hanergy Seeks to Reassure Investors on Soundness of Finances
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20150130000119&cid=1602
Earlier postings:
(1) Breakneck growth of Hanergy raises questions; The Financial Times, in analysing recent financial statements of the company, has found some unconventional practices behind Hanergy Group’s soaring fortunes; Hanergy has been racking up enviable revenues largely through sales between its listed subsidiary, HTF, and itself (Link)
A little-known Hong Kong-listed firm has come out of nowhere to become the world’s largest solar-power company by market value. A tight relationship with its parent company should give investors reason to worry whether its time in the sun will last (Link)
(2) Short sellers feel the heat from Chinese solar group Hanergy (Link)
(3) The Convoy Financial-Finsoft-Hanergy connection and aggressive accounting (Link)
Hanergy Seeks to Reassure Investors on Soundness of Finances
February 2, 2015
(Bloomberg) — Hanergy Thin Film Power Group Ltd., the Chinese solar equipment manufacturer whose market value surged to $19 billion within a two-month period, downplayed a report in the Financial Times that questioned how it reports sales. Continue reading
[Flashback] How to encourage the right kind of whistleblowers
http://fortune.com/2011/06/15/how-to-encourage-the-right-kind-of-whistleblowers/
Posted by GOH Shu Qi, Year 3 undergrad at the School of Accountancy, Singapore Management University
FORTUNE — Following in the footsteps of other agencies with successful bounty programs like the IRS, the Dodd-Frank Act has required the SEC to implement protections for whistleblowers and payments of what could be large sums for valuable information related to corporate fraud. While the SEC has been offering these protections and rewards since the Dodd-Frank Act’s passage, on May 25, the SEC established rules that will govern these procedures going forward. Continue reading
Investment scams fuel 25% rise in fraud cases coming to trial
http://www.ft.com/cms/s/0/6b5049fe-9a7b-11e4-8426-00144feabdc0.html#axzz3QYoT9FH4
Posted by SEAH Hui Ting, Year 3 undergrad at the School of Accountancy, Singapore Management University
The number of fraud cases coming to trial in the UK rose 25 per cent in 2014, driven by large numbers of investment scams . A total of £717m was lost to fraud in cases that came to court during the year, of which £216m went into fake investment schemes, the biggest single category, according to a twice-yearly fraud barometer survey by KPMG, a professional service firm. This compared with £168m the previous year. Continue reading
[Flashback] Chinese Companies in Alleged Accounting Fraud: China Biotics and West China Cement
http://www.citronresearch.com/china-biotics-chbt-is-a-fraud-%E2%80%93-now-sue-citron-we-dare-you/
Posted by CHEN Liting, Year 3 undergrad at the School of Accountancy, Singapore Management University
China Biotics (CHBT) is a Fraud – Now sue Citron- We Dare You.
Posted in Citron Reports by CitronResearch on the September 14th, 2010
Yesterday, DYP and DGW were the number 1 and 2 losers in the market declining 54% and 41% respectively. This only shows the fragility and lack of transparency that exists with small cap Chinese companies. Citron will prove that China Biotics does not just lack transparency, but rather it is an outright fraud. Continue reading
Buffett: “If you think the auditors know more…, then they should run the business and you should take up auditing.”
http://basehitinvesting.com/buffetts-petrochina-investment-finding-large-gaps-between-price-value
Posted by Joel CHUA Yong Sheng, Year 3 undergrad at the School of Business, Singapore Management University
Joel: This article is about Warren Buffet’s investment in Petrochina, his thought process and due diligence when selecting in a stock to invest to avoid the lemons and frauds.
Buffett’s PetroChina Investment: Finding Large Gaps Between Price & Value
By John Huber On August 4, 2014 · 13 Comments
“You don’t have to know a man’s exact weight to know that he’s fat.” – Ben Graham
I was reading through some notes from the 2008 Berkshire Hathaway Annual Meeting and one of the questions grabbed my attention. The question was pertaining to Warren Buffett’s decision to purchase stock in PetroChina back in 2002. Basically, the questioner was surprised that Buffett made such a sizable investment after a seemingly small amount of due diligence saying “all you did was read the annual report… Wouldn’t you want to do more research?”
Here is the question along with Buffett’s response: Continue reading
AsianExtractor: Unearthing Accounting Fraud in Asia 