GS Engineering Falls Most in Six Months after it was sued by a group of investors over losses caused by unexpected cost increases on overseas environmental projects

October 18, 2013 Leave a comment

GS Engineering Falls Most in Six Months on Lawsuit: Seoul Mover

GS Engineering & Construction Corp. (006360) fell the most in six months in Seoul trading after the South Korean builder said it was sued by a group of investors over losses caused by unexpected cost increases on overseas projects. GS Engineering dropped as much as 4.8 percent, headed for the biggest decline since April 15, to 35,400 won and traded at 36,050 won as of 12:35 p.m. South Korea’s benchmark Kospi index rose 0.3 percent. Fifteen investors filed the lawsuit against GS Engineering on Oct. 8 at the Seoul Central District Court, the Seoul-based company said in a regulatory filing today. The investors claim GS Engineering failed to make proper estimates in financial statements for costs that may arise from the projects, according to today’s statement. The builder said in April it expects an operating loss this year because of the cost increases. The company said it will appoint a lawyer to handle the case. GS Engineering in April reported an unexpected operating loss in the first quarter because costs increased for some of its overseas environment-related projects. That caused shares of builders to slump on concerns that other construction companies may face similar problems.

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

Filed under Investing Process, Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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