Court orders 3b yuan in Founder Securities assets to be frozen; Beijing Zenith has accused Founder Group directors of various crimes, including insider trading, money laundering, embezzling state assets, forging documents

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http://www.scmp.com/print/business/china-business/article/1672899/court-orders-3b-yuan-founder-securities-assets-be-frozen

Court orders 3b yuan in Founder Securities assets to be frozen

Friday, 02 January, 2015, 12:12pm

Sijia JiangSijia.jiang@scmp.com

A court has frozen three billion yuan (HK$3.7 billion) of assets of Founder Securities following complaints by stakeholder Beijing Zenith Holdings.

The freeze is the latest episode of legal battles surrounding the Founder Group, whose directors have been alleged to be linked to corruption scandals.

Founder Securities, the brokerage unit of the conglomerate with businesses in technology, health care and properties, said in a Shanghai stock exchange filing that it received the order from a court in Changsha , Hunan province, following an arbitration application from Beijing Zenith, its second-largest stakeholder. It said 1.77 billion yuan in its bank accounts had been frozen immediately, “affecting the operation of the company”. Continue reading →

Zombie Stocks: Why You Need to Avoid Dormant Shell Companies

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http://www.forbes.com/sites/johnwasik/2015/01/02/zombie-stocks-why-you-need-to-avoid-dormant-shell-companies/print/

John WasikContributor

PERSONAL FINANCE 1/02/2015 @ 9:32AM 327 views

Zombie Stocks: Why You Need to Avoid Dormant Shell Companies

Imagine companies that are pretty much left for dead, only to be revived by toxic waste handlers called penny stock promoters. These “dormant shell” companies are corporations in name only. Even though they don’t have any viable business operations, they continue to trade. Here’s how these companies are seemingly brought back to life:

A promoter hawks them to investors, thus pumping up the stock price, then dumps them without telling their customers, who get creamed. It’s a classic “pump and dump” scheme. The U.S. Securities and Exchange Commission and FINRA, the securities industry self-regulator recently warned about these zombie entities. Continue reading →

Study: ‘Going Concern’ Letters on Decline, But That May Not Be Good

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http://blogs.wsj.com/cfo/2015/01/02/study-going-concern-letters-on-decline-but-that-may-not-be-good/?mod=WSJ_hpp_sections_cfo

January 2, 2015, 9:12 AM ET

Study: ‘Going Concern’ Letters on Decline, But That May Not Be Good

JOHN KESTER

Reporter

Warnings to struggling companies are decreasing, but dead companies can’t be audited.

That’s part of the message from a new Going Concern Report by Audit Analytics. Fewer companies in the 2013 fiscal year saw red flags raised over their ability to continue as a going concern than did during the 2012 fiscal year. But that’s partly because many businesses closed up shop.

Audit Analytics estimates that 2,384 companies received “going concern” warnings for the 2013 fiscal year. That’s nearly a  6% drop from 2012. However, 207 companies that received such warnings in 2012 filed terminations and no longer exist.

“That’s not a good thing…you figure there’s some kind of economic pressure on companies,” said Donald Whalen, director of research at Audit Analytics. “You get a mixed bag if you just simply look at the number of going concern [warnings].” Continue reading →

Warning issued against L/C fraud; Korea’s Financial Supervisory Service (FSC) said that it warned banks against hoax letters of credit (L/C), purportedly issued in the name of some foreign lenders.

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http://www.koreatimes.co.kr/www/news/biz/2015/01/488_170985.html

Updated : 2015-01-02 18:38

Warning issued against L/C fraud

By Kim Jae-won

The Financial Supervisory Service (FSC) said Friday that it warned banks against hoax letters of credit (L/C), purportedly issued in the name of some foreign lenders. “We sent a letter to local lenders and branches of foreign banks to strengthen their process in managing letters of credit,” said an official at the FSC. Woori Bank and several other local banks recently discovered false letters of credit allegedly issued by foreign banks, officials said. Continue reading →

Daebo chairman charged with embezzlement, bribery

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http://www.koreatimes.co.kr/www/news/nation/2015/01/116_170996.html

Updated : 2015-01-02 19:14

Daebo chairman charged with embezzlement, bribery

By Lee Kyung-min

Daebo Group Chairman Choi Dung-kyu has been indicted on charges of embezzling some 30 billion won ($27 million) in company funds in order to bribe defense officials, the prosecution said Friday. Continue reading →

Markets tribunal overturns ratings agency Moody’s request for privacy in appeal against a fine imposed for issuing a ‘red flags’ report on Chinese companies in July 2011

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http://www.scmp.com/print/business/banking-finance/article/1672837/moodys-denied-privacy-appeal-against-sfc

Moody’s denied privacy in appeal against SFC

Friday, 02 January, 2015, 3:50am

Enoch Yiu enoch.yiu@scmp.com

Markets tribunal overturns ratings agency’s request for privacy in appeal against a fine imposed for issuing a ‘red flags’ report

A markets tribunal has overturned a request by Moody’s Investors Service for privacy in its appeal against the Securities and Futures Commission’s decision to fine the ratings agency HK$23 million.

The commission had fined Moody’s HK$23 million and publicly reprimanded the agency for breaching the code of conduct by issuing a “red flags” report on Chinese companies in July 2011. Continue reading →

The collapse of Moneual, which claimed to have achieved a trillion won venture in the shortest time ever, has revealed the vulnerability of Korea’s financial system

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http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=2998945

When business goes bad

Dec 26,2014

“It just doesn’t make sense,” a venture businessman said about Moneual, a couple of months before the innovative home appliance maker’s success turned out to be fraudulent. “It is simply impossible for a manufacturer to grow so big in only four, five years.”
He emphasized how hard it was to secure an account. “I’ve never seen a product by Moneual at appliance stores in the United States and Europe. They seem to be exaggerating unit costs and export volumes.”
Soon, his concerns turned out to be true.
The collapse of Moneual, which claimed to have achieved a trillion won venture in the shortest time ever, has revealed the vulnerability of Korea’s financial system. More than 3 trillion won in exports were fabricated, and the company owes nearly 700 billion won to banks. But financial institutions failed to detect the fraud. Continue reading →

Indonesian mining company formerly known as Bumi won a ruling that could lead to the return of $173m owed by a former executive; ruling marks a victory in the firm’s attempts to resolve apparent financial irregularities

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http://www.telegraph.co.uk/finance/newsbysector/industry/mining/11319084/Miner-formerly-known-as-Bumi-wins-ruling-against-former-director.html

Miner formerly known as Bumi wins ruling against former director

Asia Resources Minerals said it will chase Rosan Roeslani for missing £110m more than a year after he agreed to pay

Bumi, now known as Asia Resource Minerals, has lost more than 90pc of its value since joining the London market in 2010 Photo: Alamy

By Marion Dakers

2:39PM GMT 31 Dec 2014

Shares in the mining company formerly known as Bumi more than quadrupled in value on Wednesday after it won a ruling that could lead to the return of $173m (£110.8m) owed by a former executive. Continue reading →

Korean prosecution arrested the former president of Korea Trade Insurance Corporation (K-sure) for allegedly taking money to collude with venture company Moneual in an accounting fraud

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http://www.koreatimes.co.kr/www/news/nation/2014/12/116_170832.html

Updated : 2014-12-30 19:04

Former K-sure president arrested

By Kim Se-jeong

The prosecution arrested the former president of Korea Trade Insurance Corporation (K-sure) Cho Kye-ryoong on Tuesday for allegedly taking money to collude with venture company Moneual.

The arrest came amid a widening investigation into a bribery and fraud scandal involving the company. Continue reading →

The Convoy Financial-Finsoft-Hanergy connection and aggressive accounting

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http://webb-site.com/articles/newyear2015.asp

Some bubbles for New Year
31st December 2014

The HK stock exchange shut at noon today, so let’s take a New Year’s Eve virtual stroll around the market. We’ll start with Finsoft Corporation (Finsoft, 8018), which ends 2014 as the 9th largest company by market value on the GEM board, at HK$4940m. We’ll then explain how that is connected to financial advisory firm Convoy Financial Holdings Ltd (Convoy, 1019) and to a closed-end investment company, China New Economy Fund Ltd (CNEF, 0080). Finally, we’ll make a special mention of Hanergy Thin Film Power Group Ltd(Hanergy, 0566), a HK$117bn (US$15.1bn) bubble at today’s record daily high of $2.81, which makes it the 38th largest HK-listed stock. Continue reading →