Posted on 01/19/2013 8:22:27 AM PST by Former Proud Canadian
Fraudulent Chinese corporations are nothing new - we have been warning about them since late 2010, spurring the creation of a cottage industry focused exclusively on unmasking such public reverse merger companies (and generating trading profits along the way). One company, however, which apparently was completely unaware of the how pervasive Chinese corporate fraud, is industrial machine titan Caterpillar. This was made clear when, after hours on Friday night of course, the company revealed that it had been misled by "deliberate, multi-year, coordinated accounting misconduct" at a subsidiary of a Chinese company it acquired last summer, leading it to write off most of the value of the deal. In the process it would also take a $580 million, or $0.87 cent charge to earnings, which would wipe out more than half its expected earnings of $1.70 for the fourth quarter of 2012. One wonders, however, is there more to this story than just a case of a gentle, naive board duped by fraudulent, evil, cunning "Chinamen" which may have watched one too many episodes of Autonomy does Hewlett Packard?
(Excerpt) Read more at zerohedge.com ...
Read the whole article.
“China is a cesspool of fraud and deceit.”
Necessary addition ...
“The American Federal Govt. is a cesspool of fraud and deceit.”
China’s economy is full of fraud, especially their economic stats
Around fourteen years ago...some Asian guy appeared out of thin air...bought up several major Asian sewing machine companies, and then started to find capital interest for buying Singer, along with various French, Italian, and German sewing machine companies. He was creating this massive company to manage all sewing machine empires.
So the day came when he approached a New York bank and wanted in excess of $500 million to conclude a deal for a major Russian sewing machine company. This bank was down to the final moments of the deal, and then some young executive was sent on a plane to Russia to just view the factory before they did the final approval.
He shows up in a taxi at the front gate of this factor that is over 100 years old, and in terrible shape. He spends around thirty minutes (by description of the article I read) with the security guard, and comes away with the idea that this company hasn’t made a profit in their entire history...so that’s not much of a way they are worth $50 million....let alone $500 million. They stopped the deal.
Within months....this entire empire began to fall apart, and almost every country touched by this Asian guy....ended up in bankruptcy court and taking over the old company because of incompetence in financial handling.
Communism badly hobbles China from becoming what it could be. I do not wish China ill. A free China would be a boon to the world.
And the Chinese guy? Margaritaville?
US governments get away with this largely because of people who do not care, who are satisfied with the superficial.
The book value of a company's "investment" in China, as reported on the company's balance sheet, should be listed at $0. The only value this "investment" has is its capacity to produce large quantities of cheap crap by slave labor that can then be sold in the U.S. (and elsewhere) for a monetary return.
This is why Apple outsources the production of their iPhone components to China. The company doesn't even pretend it has a financial stake in the Chinese companies that produce these things. All Apple cares about is that these Chinese "assets" -- with no nominal value at all on Apple's balance sheet -- can produce components that are shipped all over the world and sold to consumers. The only "asset" Apple cares about is the finished product and the price it fetches in the mobile phone market.
I don’t feel the least bit sorry for them or any other American company dealing with China.
They looked pretty rough so several men in the office paid a call on the salesman's office in Tokyo.
It was explained that the castings were made in the Japanese village of Usa.
Usa, it was discovered, had little more than a seaweed drying industry...
Ah, you want material certifications? Yes, we can get material certifications for you. What you want them to say?
Usa, Japan! I remember that story!
I don’t feel the least bit sorry for them or any other American company dealing with China.
I too agree, I’ve said here on this forum and others that dealing with China is a no-brainer. That is you have no-brain at all if you invest your “Real Property” or your “Intellectual Property” there.
But on the other hand if you are having them produce Plastic bags or some such thing then the Low labor rates make sense. Transportation on the other hand...
Here is another story about China I saw today in Canada Free Press that claims that Obama is negotiating with China to sell off Federal land in exchange for debt forgiveness. Story is at http://www.wnd.com/2013/01/obama-selling-out-america-literally/#VbA8JrXk3vi9QfBS.99
I’d heard of that place before, which for a time allowed sharp Japanese to stamp stuff as “made in USA,” but never knew if it was more than a fictional anecdote.
The cheap junk ain’t so cheap after all....
It was a kinder, gentler time...
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