by LALAOOP
sg.news.yahoo.com/brief-kangmei-pharmas-three-senior-121833570.html
finance.yahoo.com/quote/600518.SS/
12.6B dollars (88.7B RMB) accouting fraud in the past three years.
Maximum punishment: 900K RMB fine and lifetime ban for the boss couple. 600K RMB fine and admonishment for the company, fines and 10 year bans/admonishment for the execs.
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Honorable mentions:
Chinese teleco equipment maker with over 90% net profit margin whose boss promised to build the Nicaragua Canal.
finance.yahoo.com/quote/600485.ss/
Kangdexin made up ￥12B in profit.
www.bloomberg.com/opinion/articles/2019-07-04/why-i-ve-lost-faith-in-china-s-private-sector
Bonus:
Caterpillar bought a Chinese company purely based on their paper statements several years ago, and only did the physical auditing afterwards. Turned out about 50% of the company value was just paper statements.
Wang was sacked. Caterpillar took a non-cash goodwill impairment charge of $580 million – 86 percent of the value of the deal. The company says it was caught unaware by the problems at Siwei and only discovered them in November 2012, five months after the deal closed.
A Reuters review of hundreds of pages of public documents, as well as interviews with former employees, board members, bankers and advisers, reveals a more complex story. Accounting problems were rampant at Siwei before Caterpillar bought it. Yet at multiple junctures, Caterpillar chose to ignore existing or potential problems and push ahead with the deal.
Meanwhile, Siwei has foundered. Former employees told Reuters that as of September, the company had no new orders in 2013, and it had fired or furloughed about half of its workforce.
Siwei’s former CEO, Wang, says his books were a mess but he committed no wrongdoing.
“We were a legend in the industry,” Wang, 52, told Reuters, in his first media interview since the announcement of the write-off. Wang is now pursuing a second act: He has launched a new company with a nearly identical name in the same business. He has yet to build a factory, but says he can take Siwei’s old customers when he does.