Showing posts with label share fraud. Show all posts
Showing posts with label share fraud. Show all posts

Monday 17 September 2012

Online resources - it pays to take a sceptical stance about what you read online .



A quick Internet search can often turn up good information on a particular company or investment. Likewise, visiting investment-related message boards lets you trade advice and tips with other traders. But it pays to take a sceptical stance about what you read online – some unscrupulous companies or investors actively spread false information to try and artificially boost share prices. 

Remember:

  • Investing is not for everyone, if you are unsure you should seek independent advice.
  • The value of investments can fall as well as rise and you could lose more than you initially invested. 

Tuesday 6 December 2011

Our corporate punishments are the laughing stock among foreigners. A man was sentenced to 25 weeks in jail for stealing 80 pairs of women's panties.


Time for harsher penalties

Published: 2010/06/07


There are many ways to destabilise or mismanage a company, and in Kenmark case, its top executive and directors from Taiwan went AWOL


There are many ways to destabilise or mismanage a company, and along the way, upset and annoy its minority shareholders.

In the case of Kenmark Industrial (M) Co Bhd, its top executive and directors from Taiwan went AWOL. The furniture maker's shares were sold down, losing some RM140 million of market value in a matter of days. The stock did bounce back, but not before a big damage was done and a new, "friendly" major shareholder was installed.

The latest file marked "How to upset your minority shareholders" involves Linear Corp Bhd. Initial company probe showed that one of its directors had used his autocratic rule to hand out RM36 million to a project owner/developer. The amount was an advance for a RM1.66 billion contract Perak Linear had secured from the developer, but appeared not viable.

Kenmark and Linear are among a list of listed companies that have run foul of corporate rules. Kimble Corp Bhd and Tat Sang Bhd are counted in the list, too.


Kimble, another Taiwan-owned furniture maker, breached a listing requirement in 2008 for failing to disclose in its fourth quarter 2007 results that it had made provision for doubtful debts of RM33.7 million.

Its managing director Datuk Yao Bor Bin and former executive director Yao Po Chen were fined by Bursa Malaysia a total of RM75,000 "for being ambiguous and inaccurate in the announcement". The company was delisted in April 2009.

Tat Sang, another furniture maker, shocked investors with its accounting irregularities and the disappearance of key management personnel back in 2002.

Its former managing director Lim Chai Hock was sentenced to five years' jail by the Sessions Court for making false statements to Bursa Malaysia. The sentence was revised by the High Court to a five months' jail and a fine of RM200,000 in default of two months' imprisonment.

Tat Sang was plagued with financial woes just a year after its listing in 2000. It was eventually delisted in 2003.

The point here is that once a corporate manipulator is caught and goes to court, make sure he (interestingly, women is almost or non-existent in the issue) is punished accordingly.

While our local stock market watchdogs, the Securities Commission particularly, may have been swift in their action, the punitive measures appear lenient on corporate manipulators.

Some have said in jest (or are they not kidding?) that our corporate punishments are the laughing stock among foreigners. Swindle loads of money from your company and leave the country, you can then come back and face the low-decibel music.

We may have read that a man was sentenced to 25 weeks in jail for stealing 80 pairs of women's panties. For mismanaging or embezzling millions of ringgit or causing hurt and grievance to many investors, you just get a fine or a brief spell in prison. Some balance in blue and white collar crimes, right? Is there a very fine line in steal, cheat or lie between a corporate man and an ordinary Joe?

In February 2006, it was reported that Fountain View Development Bhd former director Datuk Chin Chan Leong and ex-remisier were found guilty of share manipulation.

Chin was fined RM1.3 million or in default of 13 months' jail as well as sentenced to serve one day in prison for manipulating its share price seven years before.

Hiew Yoke Lan, a former Avenue Securities Sdn Bhd remisier, was fined RM1 million or 10 months default jail sentence for abetting Chin in the offence.

The offence was committed between November 18 2003 and January 20 2004. During this period, Fountain View stock had a low of RM1.99 and a high of RM6.15.

Back in November 2003, at a low of RM1.99, Fountain View carried a market capitalisation of RM885 million. At the peak of the share manipulation of around RM6.15, Fountain View carried a market capitalisation of RM2.73 billion!

If Datuk Seri Idris Jala can overhaul the various subsidies enjoyed by us, how hard can it be to review and slap the harshest possible punishment on corporate manipulators?

Read more: Time for harsher penalties http://www.btimes.com.my/Current_News/BTIMES/articles/zuview6/Article/index_html#ixzz1fhYjGpf6

Saturday 9 October 2010

Facebook, Twitter used in US stock fraud

October 06, 2010



Facebook and Twitter feeds were used to allegedly defraud the investing public. — Reuters picNEW YORK, Oct 6 — Facebook and Twitter social networking sites were used to tout stocks in a classic “pump and dump” fraud of about US$7 million (RM21.7 million) that was uncovered during a cocaine-trafficking probe, US prosecutors said yesterday.

Investigators discovered the fraud in a two-year probe of suspected trafficking by longshoremen and others of 1.3 tonnes of cocaine worth US$34 million through the Port of New York and New Jersey officials said.

A statement by the Manhattan US Attorney’s office said 11 out of 22 people charged used more than 15 web sites, Facebook pages, and Twitter “feeds” to “defraud the investing public into purchasing stocks that were being manipulated by participants in the conspiracy.”

A spokeswoman for Twitter declined to comment on the announcement. A spokesman for also Facebook declined to comment.

Eight longshoremen and three others face narcotics trafficking charges. Eleven people, including one longshoreman, face charges of conspiracy to commit wire fraud in the purported stocks scheme.

Documents filed in Manhattan federal court said the 11 were from New York, Florida and Pennsylvania. They are accused of orchestrating web site links that touted picks in four penny stocks said to be based on the authors’ expertise and independent research.

They face up to 20 years in prison if convicted.

None of the stocks were identified in court documents, which said more than US$3 million was accrued in illegal gains by the accused and that shareholder losses amounted to more than US$7 million.

The case is USA v. Susser et al, US District Court for the Southern District of New York, No. 10-mag-2190. — Reuters

Friday 30 July 2010

Incredible Claims. Sadly, some Suckers will part with their money due to Ignorance and Greed

Received this in my comment column.  I have deleted the name of the company, so that we may examine the claims made in this letter.

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Tuesday 9 March 2010

DIS Technology - Check List: What can we learn from this ugly saga?

As with Transmile, it is sad that the investors are again caught in such a fraud.  There must be heavy penalties for those involved, not least, to emphasize the seriousness of this matter and to deter future such happenings.

Could this fiasco, of false accounting, be predicted looking at the latest quarterly reported results?  Often the answer is NO, though it was obvious that the company's business was deteriorating and the balance sheet was not good quality. 

The revenues and earnings were manipulated in the accounting.  However, the cash flow statement would have indicated that not all is well with the company.  The CFO was strongly negative.

http://spreadsheets.google.com/pub?key=tZmdsnrXUbsFVCAmAaQRW4g&output=html

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Blogger Wisdom Wise has written a nice article on reading the annual report which I have copied and paste here:

Tuesday, March 09, 2010


Reading the Annual Report

When you look at a woman, which part of her anatomy do you look at first? Is it her face, her bosom or her bottom? It is all a matter of choice. It doesn't matter so long as you get to look at the whole picture. Now, when you look into an annual report, it is the same. Which statement do you prefer to see first. Is it the income statement, the cash flow statement or the balance sheet? Personally, I go straight for the balance sheet to find out what the company has and what it owes others. If I don't find things attractive there, I will just close the report, avoid the stock and move on.
The things that I pay attention in the balance sheet are: Paid-up capital, par value per share, retained earnings, current assets, and current liabilities. I pay special attention to its cash position and how much debt it has. If its debt is too high, when compared to its equity, I will normally lower the grading of the stock. Don't forget that all companies that folded are those with very high debt.
From the balance sheet, I go to the income statement , the cash flow statement, and then the CEO's statement, or Chairman's statement. If both are available, I'll read them both and also the notes in the annual report to ascertain that the company is not involved in any litigation. Lastly, I will go to the page that shows the names of the majority shareholders. A strong major shareholder is a advantage. Take the case of YTL Cement whose major shareholder is YTL Corp.
Things to consider when assessing a company are as follows: a) Calibre of management; b) Modal of business; c) Earnings per share; d) Dividend yield; e) Cash and debt position; f) Barrier of entry; and g) sustainability of profit.

Friday 2 October 2009

Frederick Forsyth lost his fortune through a share fraud and divorce.

Frederick Forsyth: 'I lost £2.2m in a share fraud'
Frederick Forsyth lost his fortune through a share fraud and divorce.

By Mark Anstead
Published: 3:37PM BST 01 Oct 2009


Frederick Forsyth: 'Returns are minimal at the moment but I don't run around tearing my hair out' Photo: IAN JONES Have you learnt any difficult lessons about money through mistakes?
I've lost money twice, first in the mid-Seventies under Edward Heath when we were looking at inflation of 22pc or 23pc per annum. After Margaret Thatcher we all forgot what hyperinflation was, but at 23pc everybody's assets were disappearing down the plug hole.

My financial advisers told me to hedge against inflation by buying either gold or diamonds and I bought gem diamonds because their carat rating can be certified. It was a gross mistake – I invested about £200,000 and got back just £133,000 three years later.

My second mistake was trusting Roger Levitt. I saw him as a personal friend, but he turned out to be a con man. He wasn't like Bernard Madoff – Levitt never promised ridiculous levels of return.

His talent was to recommend a portfolio of about 20 shares and then suggest that, since there was a lot of paperwork and you would have to sign 20 cheques, why not let him do it for you? You just gave him one cheque payable to the Levitt Group and he promised to do all the hard work, but in fact I never saw the money again.

How much did you lose with Levitt?
At last count in 1988 my portfolio was worth around £2.2m. I know that because I parted with my wife that year and, because we didn't want to quarrel, I gave her my properties while I took the shares. Then a few years later Levitt was arrested and my portfolio turned out to be worthless – so I went from having been worth £4.6m before my divorce to zero. I had to start all over again and I worked my butt off writing five books in five years to make my second fortune.

Do you still invest much?
Yes. I still have a portfolio of shares, but now I do everything directly and I tell my broker I don't mind if he asks me for 50 cheques – I want to see them going into the different companies. The chances of being ripped off by all of them are then very slight.

Has the fall in market values dramatically affected you?
I'm philosophical about it. I recognise that return on investment is minimal at the moment, but the values of shares are now coming back, so I don't run around tearing my hair out. You hear about people who were worth £100m and their net worth fell to £3m, but £100m is a hell of a lot and probably a large part of that was either borrowed or highly speculative. I am only invested in very solid blue-chip companies or funds operated by known investors who always appear in the top quartile in terms of performance.

How did your childhood experience influence your attitude to money?
There is an old Jesuit saying, "Give me the boy until the age of seven and I will give you the man." The attitude my parents took to money is stamped into my psyche and has never left me.

As middle-class English shopkeepers in the small town of Ashford in Kent, they felt you had to earn money by hard work alone. The idea that anyone could win money, marry it or inherit it was out of the question for them, and cheating, lying, stealing or embezzling was beyond taboo. So I grew up knowing I needed to be very industrious.

I was raised in a fairly substantial semi-detached five-bedroom Edwardian house, and as an only child I had the top floor to myself – a bedroom and a nursery. My father told me that whatever I wanted to do he would support me, and when I left school early to go into the Royal Air Force, he was thoroughly approving.

Are you cautious with money or liberal? Where does that tendency come from?
I'm illogical. I will save and reuse envelopes, telling myself that I'm saving trees, but all I'm really trying to do is save money. On the other hand I'll give money to good causes and then laugh to myself that I save envelopes. I'll turn the lights off in empty rooms because it offends me to see money wasted and I resent people who fritter money away in casinos when it could have been used by someone who needs it.

Now that you are better off, are you happier?
Yes, I think so, but I had it drilled into me as a boy never to worship money. I was in my late thirties before financial success came to me and by then I had travelled the world and had a lot of experience.

Financial freedom is what I value most – I don't have to get up in the morning and go into an office and bow to the boss. And there is comfort in knowing that if I want something, I can usually have it, within reason. I wouldn't think it reasonable to own a private yacht or jet.

How do you separate responsibility for finance with Sandy?
I don't give her an allowance – she just shares a credit card with me and whatever the house needs in terms of food and other consumables is charged to that card. Sandy also has her own bank account and some of her own assets. She has shrewdly invested in a portfolio of shares that generates enough income for her own clothes, but I pay for everything else.

How do you prefer to pay for things, cash, card or cheque?
I'm still very old-fashioned – I like to pay most of my bills by cheque. I am constantly being asked to pay by direct debit, but I keep seeing a high level of inaccuracy in my bills and I often query them because a figure is wrong. So I much prefer to stare at a bill first and then hand over a cheque.

But I also pay by credit card and, thankfully, I've never experienced credit card fraud. But I'm very dubious about it because when you pay over the phone they always ask you for all the details from the card, including the security card number on the back. What's the point of having a security number if you have to tell everybody what it is?

How do you tip? Are you an easy tipper or do they have to work hard with you?
I like to tip in the upper to mid range. I first check to see if it is already included on the bill and if it is I will usually leave a little extra, but if it's down to customer discretion I leave between 12.5pc and 15pc.

What's been your greatest extravagance?
I have indulged in classic sports cars over the years – I've got a Jaguar XKSS and an Austin Healey 3000 – and I love diving or snorkelling twice a year in the tropics.

What kind of a home do you live in?
It's a farm. When I grew up in Ashford it was all agricultural and I was often visiting friends on their farms. I thought one day I would like to have one of my own with all the animals and constant activity. Then in 1988 I bought my Queen Anne Grade II listed farmhouse near Hertford with 175 acres for £350,000 and I love it here – they'll have to carry me out in a box.

Do you invest in individual savings accounts (ISAs)?
Yes, because my accountant thinks they are worthwhile. I never really need the money I put into them so it just sits there and grows tax-free.

Do you use high-interest savings accounts?
I have a deposit account with one small private bank and I simply transfer money from that account into my Barclays current account as I have need. I haven't spread my money around because my bank is run by very frugal people and I don't think it was ever at risk. I ask virtually nothing of Barclays for my current account – I've been with them for 40 years and I just keep it running at just above zero.

Do you bank online?
No, because I'm not computer-literate. And anyway, I'm suspicious of it – I read about people having their accounts penetrated and identities stolen through computer hacking. Every day I sit at my little Japanese typewriter and I tell people it's impossible to hack into a typewriter.

Is there a reduced demand for your services because of the current squeeze?
Thankfully, I negotiated the contract on my new book before the recession started. I only get paid royalties when the advance has been topped out, but my excellent agent usually manages to secure such a ludicrously large advance that it takes several years before that ever happens.

Do you think pensions are a good idea? If not, why not?
When I was a young man I could never envisage being old. I started saving into a pension fund when I was about 40, but I haven't touched the money yet so it's just accruing. I'll either be a rich old b------ in a wheelchair or a rich old corpse.

Frederick Forsyth's next novel, 'Cobra', to be published next year, has already raised £990 for Leonard Cheshire Disability last month after a charity auction to name a character in the thriller


http://www.telegraph.co.uk/finance/personalfinance/fameandfortune/6249853/Frederick-Forsyth-I-lost-2.2m-in-a-share-fraud.html