Maybe the money’s in Al Capone’s vault

Reuters finds GAAP, 10K’s and auditors have gone missing:

the disappearance of a combined $6.1 billion from two Chinese companies has dumbfounded investors and forced regulators to take action. Kangmei Pharmaceutical Co Ltd, a constituent of MSCI’s global indexes, in April said an “accounting error” led it to overstate cash in 2017 by 29.94 billion yuan ($4.3 billion). This month, Kangde Xin Composite Material Group Co Ltd, a producer of high-polymer materials, said its auditor could find no trace of the 12.21 billion yuan ($1.8 billion) that it said it held in a bank deposit.

Very bizarre. Explanation offered here in an old song. We learned about this from a video by Air Force General Robert Spalding, recommended to us in the last post. Wretchard quotes from it a lot. There’s a lot of scary stuff about G5, and Spalding asserts there will be no trade deal until after 2020. We’ll see.

3 Responses to “Maybe the money’s in Al Capone’s vault”

  1. feeblemind Says:

    Off topic but fun to see. Toys that were mostly sold when I was a kid, but the busybody who made the video opines after each commercial why these toys were “too dangerous” for little kids. The commercials are nostalgic fun. The finger wagging not so much.

    They really pick on Wham-o.

    Incredibly Dangerous Toys From the Past You’ll Be Left Speechless

  2. feeblemind Says:

    China plays by China’s rules.

  3. Bob Risko Says:

    What kind of accounting error “accidentally” overstates cash by $4.3 billion? When a firm makes a cash sale, or converts a receivable to cash, or issues debt, etc., bookkeepers debit — I.e., increase -– cash (or cash equivalents). It’s that simple. So are these bookkeepers telling us they debited cash when they shouldn’t have? It’s impossible to imagine a scenario under which this would happen, unless they were booking ‘anticipateds’ — sales, turns, and proceeds -– as ‘actuals.’ All of which would be impossible in an honest firm. The whole thing stinks of massive, deliberate fraud; the books are inflated.

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