The Star Online: Business

SEC takes Deloitte China unit to court
Report: Bank of America job cuts could hit 40,000
GLP eyes US$1.3b IPO of Japan assets

Posted: 09 Sep 2011 09:24 PM PDT

WASHINGTON: The US securities regulators have asked a federal court to force a Chinese unit of accounting giant Deloitte & Touche to produce records related to possible accounting fraud at Longtop Financial Technologies Ltd.

The Securities and Exchange Commission (SEC) effort to enforce a subpoena against Shanghai-based Deloitte Touche Tohmatsu CPA Ltd underscores the difficulties regulators face in probin accounting irregularities at US-listed Chinese companies.

The Deloitte unit abruptly resigned in May of this year after uncovering "numerous improprieties" during its audit of the Chinese software company for the year ended March 31.

Deloitte had no immediate comment on the SEC action, and repeated efforts to contact its lawyers were unsuccessful.

The SEC said Deloitte had argued it should not be required to produce documents that predate the 2010 Dodd Frank Wall Street oversight law, and that producing any documents could subject it to sanctions under Chinese law.

"This is a culture clash that the SEC is throwing to the courts to resolve," said Jacob S. Frenkel, a former senior counsel in the SEC's enforcement division and now a partner at Shulman Rogers Gandal Pordy & Ecker.

The subpoena enforcement filed in US District Court in Washington D.C. marks the boldest move yet by the agency against a big accounting firm in its crackdown on fraud at Chinese companies that list on US exchanges.

Next month, the US and Chinese accounting watchdogs are due to meet in Washington for a second round of talks on joint inspections of auditing firms in China.

The chairman of the US Public Company Accounting Oversight Board recently chided big accounting companies, saying they had a responsibility for the quality of audits conducted by their units in other countries.

Jake Zamansky, a lawyer who pursued investment banks after the dotCom crash on behalf of investors, predicted Deloitte would ultimately comply with the subpoena.

"Ultimately the SEC and PCAOB can take their licence away. As long as it has the name Deloitte on it, they have a responsibility to adhere to US laws," said Zamansky.

The SEC is seeking evidence to support its investigation into what it described as "an apparently massive fraud on the domestic securities markets" by Longtop, a Cayman Islands corporation with principal offices in China and Hong Kong.

It said Deloitte had failed "in every respect" to comply with its subpoena.

"Compliance with an SEC subpoena is not an option, it is a legal obligation," said Robert Khuzami, the director of the SEC's division of enforcement.

"Subpoena recipients who refuse to comply should expect serious legal consequences."

Subpoena enforcements by the SEC are relatively rare, the agency filing just 31 similar actions in the past five years.

Prominent previous recipients of SEC subpoena enforcements have included Enron's former chief financial officer Andrew Fastow and tobacco company RJ Reynolds.

The SEC and the Federal Bureau of Investigation have been probing US-listed Chinese companies and their auditors amid a recent rash of accounting scandals. Reuters

Report: Bank of America job cuts could hit 40,000

Posted: 09 Sep 2011 09:24 PM PDT

NEW YORK: US financial giant Bank of America is considering cutting up to 40,000 jobs as part of a hotly anticipated round of belt-tightening, the Wall Street Journal reported yesterday.

The Journal cited unnamed sources as saying the company had discussed cuts of 30,000 to 45,000 jobs, but it said the numbers could still change and that the decision would be carried out over a period of a few years.

Such cuts would amount to more than 10% of the company's workforce.

The bank has been pummelled with losses from the 2007-2009 financial crisis and has recently been hit with a series of multi-billion dollar lawsuits relating to dodgy mortgage-backed securities issued by its subsidiaries, Countrywide Financial and Merrill Lynch.

Weighed down with the lawsuits, the bank reported a net loss of more than US$9bil in the second quarter.

Amid rumours that it had serious capital deficiency problems, last month it announced a US$5bil injection from investment guru Warren Buffett's Berkshire Hathaway.

It has also said it will sell half of its 10% stake in China Construction Bank to raise about US$8.3bil in cash. - AFP

GLP eyes US$1.3b IPO of Japan assets

Posted: 09 Sep 2011 09:20 PM PDT

Saturday September 10, 2011

TOKYO: Singapore's Global Logistic Properties (GLP) is planning an initial public offering of its Japanese assets that could raise at least 100 billion yen (US$1.3bil) in the first IPO for a real estate trust in Japan in five years, three people with direct knowledge of the matter said.

GLP, the warehouse unit of Singapore wealth fund GIC, had hired Citigroup Inc, Goldman Sachs and Nomura Holdings as the main underwriters for the IPO, said the people, who asked not to be identified. - Reuters

Kredit: www.thestar.com.my

Sabtu, 10 September 2011