Skip to comments.Caterpillar Punked By Chinese Fraud, To Write Off Half Of Q4 Earnings
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 ...
chicom bump for later......
Fraud and corruption in China? Who knew?
“Paging Jackie Chan ... paging Jackie Chan ....”
Everything you have heard about China - good and bad - is true. China is so huge that both realities exist simultaneously.
Joint ventures with Chinse firms obviously involve much more risk than merely buying finished products, and therefore require much more due diligence. Many American companies have built successful new venture in partnership with Chinese firms. But it sounds like Caterpillar - like HP - got a little lazy with the research in their zeal to make some easy money.
Several somebodys in the Legal Dept. are in deep doo methinks.
I am sure the Free Trade Communists who routinely shill and support Free Trade with Communist China...will have some spin on this
StupidNomics rears its head again...getting burned by the Communist Chinese
The Commie Chinese know they can roll any American concern because of Free Trade stupidity. This nonsense will end once the US starts slapping tariffs on the Commie Chinese