South Korea tycoon and CJ chairman Lee Jae-Hyun charged with embezzlement, tax evasion; stashed away undeclared assets worth about 96 billion won (S$108.5 million) and evading taxes worth 54.6 billion won since 2004

South Korea tycoon charged with embezzlement, tax evasion

Published on Jul 18, 2013
SEOUL (AFP) – The head of South Korean food and entertainment giant CJ Group was charged on Thursday with embezzlement and tax evasion, as Seoul seeks to rein in family-controlled business groups. Lee Jae-Hyun, 53, allegedly stashed away undeclared assets worth about 96 billion won (S$108.5 million) and evading taxes worth 54.6 billion won since 2004. “This is a case where a business tycoon illicitly pocketed funds diverted from listed companies and evaded tax,” Prosecutor Park Jeong-Shik told journalists. Lee created some 10 shell companies in foreign countries, including Singapore and Hong Kong, to avoid tax, he said. Three other former and current executives of the group were also charged as accomplices.

Future of STX remains in doubt; W3 tril. liquidity injection plan fails to restore confidence

2013-07-17 16:55

Future of STX remains in doubt

W3 tril. liquidity injection plan fails to restore confidence
By Kim Rahn

Concerns are growing over a plan by creditors to inject 3 trillion won into cash-strapped STX Offshore & Shipbuilding because it is uncertain whether the shipbuilder will recover, even with the fresh liquidity.
Experts say the company’s full recovery depends on unforeseeable economic factors. Even creditors have raised concerns over whether the shipbuilding firm will recover and become profitable again because the sluggish shipbuilding and shipping industry are unlikely to improve soon. Read more of this post

China Resources Power fell the most in more than four years after Xinhua media said the power generator and the chairman of its state-owned parent intentionally overpaid for a 2010 acquisition

China Resources Power Falls After Report of Deal Overpayment

China Resources Power Holdings Co. (836) fell the most in more than four years after the official Xinhua News Agency posted a letter on its website by one its reporters that said the power generator and the chairman of its state-owned parent intentionally overpaid for a 2010 acquisition.

The company’s shares fell as much as 11.8 percent, the biggest drop since Nov. 6, 2008, and were trading down 10.4 percent as of 2:20 p.m. in Hong Kong. The city’s benchmark Hang Seng Index was little changed. Read more of this post

The woeful admission by Treasury Wine Estates that inventory levels had been grossly mismanaged and overstated is going to lead to a major rethink by the market about what this company has been doing for the past couple of years

US wine stocks stain market darling

July 16, 2013

Elizabeth Knight

The woeful admission by Treasury Wine Estates that inventory levels had been grossly mismanaged and overstated is going to lead to a major rethink by the market about what this company has been doing for the past couple of years.

Under chief executive David Dearie, Treasury Wine has been telling a positive story about remaking the company, focusing on the high-end brands and installing proper management disciplines – a goal made possible thanks to winning independence from Foster’s in 2011. Read more of this post

Accounting Scandal Hooks Spanish Frozen Fish Giant; “It’s Enron, Spanish style. There was a tangle of subsidiaries set up solely and uniquely to hide the debt.”

Accounting Scandal Hooks Spanish Frozen Fish Giant

By Katell Abiven on 2:45 pm July 14, 2013.

A Pescanova’s store is pictured in Vigo, northwestern Spain, on June 26, 2013. The head of Spanish frozen fish giant Pescanova admitted on July 11, 2013 he may have made bad decisions after an auditor’s report said the group deliberately fabricated deals and financial results to disguise a 3.28-billion-euro ($4.3 billion) debt. (AFP Photo/Miguel Riopa)

Madrid. It boasts a fleet of 100 ships and 10,000 employees worldwide but suspected fraud at frozen seafood giant Pescanova is causing an embarrassing stink in export-hungry Spain. After years of posting growing sales, amounting to 1.7 billion euros ($2.2 billion) in 2011, the group that was among the world industry’s leaders and the pride of the northern region of Galicia has plunged into scandal. One evening in February, Pescanova was forced to reveal that it could not publish its 2012 accounts. Two months later, on April 25, it filed for bankruptcy. “That was a surprise,” said Francisco Vilar, regional secretary of the food-processing federation of the main union at Pescanova, the Workers’ Commissions (CCOO).  People who work here have been here for 30, 40 years, with good management. So it was an enormous surprise.” Pescanova is accused of false billing, hiding a debt of 3.3 billion euros that was more than double the declared figure, and its top managers of selling shares just before the scandal broke. “It’s Enron, Spanish style,” said one banking source, referring to the giant US energy group that collapsed in the 2000s in one of the biggest financial scandals in US corporate history. Read more of this post

From $177 Million to $2.6 Billion: Once teetering on the edge of bankruptcy, Restoration Hardware is turning into a bonanza for its private-equity owners.

Updated July 14, 2013, 7:58 p.m. ET

Restoration Hardware’s Renovation Is Private-Equity Boon

Restoration Hardware Holdings Inc. is turning into a bonanza for its private-equity owners.

By RYAN DEZEMBER and MATT JARZEMSKY

RH +1.01% Once teetering on the edge of bankruptcy and subject of a buyout bidding war during which offers shrank, Restoration Hardware Holdings Inc. RH +1.01% is turning into a bonanza for its private-equity owners. The firms that bought the luxury-home-furnishings retailer in 2008 are on track to make about eight times their initial investment, when including their remaining stock holdings in the company, according to a Wall Street Journal analysis of securities filings. This is a huge return among deals struck in the years leading up to and during the financial crisis. Five years ago, as the housing crash crimped the company’s profits, a group led by Connecticut private-equity firms Catterton Partners and Tower Three Partners LLC and the retailer’s chief executive took the company private for about $177 million. Restoration still doesn’t turn out consistent profits. But today the retailer, which returned to public ownership in a November initial public offering, has a stock-market value of about $2.7 billion. Read more of this post

Stella International Takes on LVMH to Expand in Paris

Stella International Takes on LVMH to Expand in Paris

Stella International Holdings Ltd. (1836), the Asian shoemaker that manufactures for companies such as Prada SpA (1913), plans to expand its own brands in Paris, turning into a lower priced competitor to luxury clients there.

The contract manufacturer plans to add two shops in Paris by end of this year and expand into other locations in Europe, Stephen Chi, chief executive officer of the company’s women’s footwear and retail business division, said in a July 10 phone interview. The company, which was founded in Taiwan and trades on the Hong Kong stock exchange, already has one Paris store. Read more of this post

The hidden costs of investing

July 12, 2013 5:43 pm

The hidden costs of investing

By Lucy Warwick-Ching

Picture the scene. You’ve splashed out on the latest Aston Martin. But as you climb into the driver’s seat you’re asked to pay a fee for the key to the car and another charge for its manual. Then, just as you’re about to drive off the dealer’s forecourt you’re hit with yet more charges – an exit fee for leaving the garage, followed by separate charges for the leather seats and passenger door. Most of us wouldn’t keep silent if this scenario happened in real life, so why do so few investors complain about the percentage of their money that goes on charges? “Confusion about charges on investment funds and pensions has left most investors in the dark about how much they are paying,” says Gina Miller of SCM Private, a wealth manager, who is spearheading a“True & Fair Campaign” to encourage better disclosure of investing costs. Read more of this post

Hong Kong regulators are reportedly investigating allegations of fraud against Zoomlion Heavy, China’s second-largest construction machinery maker

Probe into Zoomlion 
Thursday, July 11, 2013
Hong Kong regulators are reportedly investigating allegations of fraud against Zoomlion Heavy Industry Science and Technology (1157). Guangzhou-based Southern Metropolis Daily and Yangcheng Evening News received two documents showing Hong Kong Exchanges and Clearing (0388) and the Securities and Futures Commission accepted complaints against the Changsha-based machinery maker on June 7. They allege the firm is involved in manipulating profit and misleading investors by making false statements. The anonymous complaints also noted similar allegations against Zoomlion were presented to the China Securities Regulatory Commission on Tuesday.Both the HKEx and SFC declined to comment on the issue. Zoomlion shares fell 1.78 percent yesterday to HK$4.98. Since allegations first surfaced in January, the stock has declined 57 percent. NATALIE NGAN

Financial fraud investigation into Chinese wind energy giant Sinovel after a few years of explosive growth

07.11.2013 18:48

Post-Boom Blowdown for Wind Energy’s Sinovel

A wind energy giant is in trouble with regulators, customers and investors after a few years of explosive growth

Pu Jun and Yu Ning

(Beijing) — Wei Wenyuan’s sudden resignation stunned his colleagues at Sinovel Wind Group but started making sense two weeks later when securities regulators announced a financial fraud investigation targeting the company. Wei’s departure May 13 after just two months as chairman and eight months as acting president also mirrored the turbulent atmosphere at Sinovel, one of China’s largest wind turbine manufacturers as well as a developer of wind farms locally and overseas. Read more of this post

Performance of China’s Hong Kong Shares Has Been a Long-Term Letdown

July 4, 2013, 5:34 p.m. ET

Performance of China’s Hong Kong Shares Has Been a Long-Term Letdown

DANIEL INMAN

When Tsingtao Brewery Co. 600600.SH +0.48% went public in Hong Kong in July 1993, runaway investor demand for the beer maker’s new shares lifted them 29% on their first trading day. Since then, nearly 600 other big Chinese companies have raised a total of about $250 billion through initial public offerings in Hong Kong, according to Dealogic. IPOs by banks, real-estate developers and other firms opened the door for foreign investors eager to bet on China’s booming economy—and vaulted Hong Kong into a big-time rival to New York and London in the global battle for new stock listings. But the performance of so-called H-shares, as Hong Kong listings of companies incorporated in China are known, has been a letdown. The Hang Seng China Enterprises Index is up 43% since its birth in 1994. Economic growth in China has averaged 10% over the past two decades. In comparison, Japan’s Nikkei Stock Average lost 30% in a prolonged period of economic stagnation, and the U.K.’s FTSE 100 index gained 101%. Read more of this post

CJ Group has gone into emergency mode after Chairman Lee Jay-hyun was arrested Monday on charges of creating secret funds and evading taxes

2013-07-02 17:24

CJ put on emergency footing

By Kim Tae-jon

CJ Group has gone into emergency mode after Chairman Lee Jay-hyun was arrested Monday on charges of creating secret funds and evading taxes.  Read more of this post

China’s Lady Buffett and HK-listed white spirits company Silver Base wrote off more than HK$600 million worth of sales that it could not recoup

Drink firm has little to cheer as ban hits
Victor Cheung
Tuesday, July 02, 2013

Economic slowdown and a ban on liquor consumption at official banquets sparked losses of more than HK$1 billion for the year to March 31 at Silver Base (0886). The distributor of several famous brands of white spirits, or baijiu, also wrote off more than HK$600 million worth of sales that it could not recoup. For the 2012-13 fiscal year, losses hit HK$1.13 billion, compared with a profit of HK$926 million in the previous fiscal year. Revenue slumped 87percent to HK$390.19 million. The losses include HK$650 million impairment and write-off loss for trade receivables, and some HK$100 million for inventory provision. In addition, inventories doubled to HK$1.22 billion. Liquor bans on government departments have “brought a direct and severe hit to the sales of high-end baijiu” brands such as Wuliangye, the company said. But Wuliangye Yibin, the maker of upmarket baiju, still saw 50percent in bottom line growth in the same period. Since 2009, chairman Liang Guoxing has been reducing his stake from 67percent to less than 50percent. New World (0017) group founder Cheng Yu-tung has also downsized his stake in Silver Base from the second half of last year, from more than 8percent to less than 5percent. But Liu Yang, chairwoman of Atlantis Investment Management, spent some HK$258 million to buy the firm’s shares from September and now holds a 14percent stake. Read more of this post