The U.S.-China Cold War Over Accounting
Label: BusinessU.S. regulators are cracking down on Chinese companies for issuing misleading financial reports. But the feds have been stymied so far by a wall of resistance to U.S. accounting rules—and not just from the companies.
The Securities Exchange Commission on Dec. 3 formally accused the Chinese affiliates of the Big Four accounting firms of violating U.S. law. The issue at hand: failure to provide documents in ongoing accounting fraud investigations of nine U.S.-listed, China-based companies.
Ernst & Young Hua Ming, Deloitte Touche Tohmatsu Certified Public Accountants, KPMG Huazhen, and PricewaterhouseCoopers Zhong Tian CPAs have been charged “with violating the Securities Exchange Act and the Sarbanes-Oxley Act, which requires foreign public accounting firms to provide the SEC upon request with audit work papers involving any company trading on U.S. markets,” said a statement on the SEC website. The SEC also named a fifth U.S. firm, BDO China Dahua.
“Only with access to work papers of foreign public accounting firms can the SEC test the quality of the underlying audits and protect investors from the dangers of accounting fraud,” SEC Enforcement Director Robert Khuzami said in a prepared statement. “Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions.”
Over the past two years, the SEC has audited scores of Chinese firms amid concerns that many are issuing financial statements that don’t reflect their real operations. The alleged violations include overstating revenue and profit. Many of them have listed on U.S. exchanges through so-called reverse mergers—when a company buys a largely inactive shell company that already has a listing and so can avoid strict disclosure requirements. To date, the SEC has deregistered almost 50 companies, including China MediaExpress Holdings, and launched fraud investigations against more than 40 issuers and company executives.
The investigations, however, have faced serious obstacles to gathering evidence within China. Beijing’s attitude has been that its own accounting system is fully adequate and that there is no need for the U.S. to conduct its own probe. And China’s security regulators and finance officials have been loathe to participate in any joint investigation.
The international accounting firms, for their part, say compliance with SEC demands would mean breaking Chinese law. “The fact that the action is being taken collectively against all of the four largest audit firms and one other firm demonstrates that this is a profession-wide issue,” Caroline Nolan, a PricewaterhouseCoopers spokeswoman, said in an e-mail statement. “For its part, PwC China has cooperated with the SEC at every opportunity. However, PwC China will, and must, comply with its legal obligations under China law.”
“Ernst & Young Hua Ming supports close working relationships between regulators to enable them to cooperate and share information with one another,” Will White, director of global and EMEIA media relations for Ernst & Young, said in an e-mail statement. “We hope that an agreement can be reached between U.S. and Chinese regulators that will enable our compliance with all applicable laws and regulations.”
The issue is also tied up with China’s historic resistance to perceived foreign meddling in its internal affairs, says Paul Gillis, a professor at Peking University’s Guanghua School of Management and an expert on China’s accounting standards. National security has also been raised as a possible concern by Beijing. This makes any resolution even less likely, and the impasse could eventually lead to the delisting of all Chinese companies in the U.S., predicts Gillis.
“The U.S. is looking at this in terms of its own laws and regulations,” says Gillis, who maintains a blog on China accounting. “China is approaching this issue more ideologically, from a national sovereignty issue. This involves Chinese views of foreign oppression going all the way back to the Opium Wars and Japanese occupation. The idea of foreigners pushing around Chinese is deeply offensive.”
Businessweek.com — Top News
Officials: NATO to decide on missiles for Turkey
Label: WorldBRUSSELS (AP) — NATO foreign ministers are expected to approve Turkey‘s request for Patriot anti-missile systems to bolster its defense against possible strikes from neighboring Syria.
NATO foreign ministers are meeting on Tuesday and Wednesday in Brussels. Parliaments in both nations must approve the deployment, which would also involve several hundred soldiers.
Ankara, which has been highly supportive of the Syrian opposition, wants the Patriots to defend against possible retaliatory attacks by Syrian missiles carrying chemical warheads. NATO leaders have repeatedly said they would provide any assistance Turkey needs.
Europe News Headlines – Yahoo! News
Judge gives initial OK to revised Facebook privacy settlement
Label: Technology(Reuters) – A U.S. judge on Monday gave his preliminary approval to a second attempt by Facebook Inc to settle a class action lawsuit which charges the social networking company with violating privacy rights.
U.S. District Judge Richard Seeborg in California rejected a settlement in August over Facebook‘s ‘Sponsored Stories’ advertising feature, questioning why it did not award money to Facebook members for using their personal information.
But in a ruling handed down Monday, Seeborg said a revised settlement “falls within the range of possible approval as fair, reasonable and adequate.”
In a revised proposal, Facebook and plaintiff lawyers said users now could claim a cash payment of up to $ 10 each to be paid from a $ 20 million total settlement fund. Any money remaining would then go to charity.
The company also said it would engineer a new tool to enable users to view content that might have been displayed in Sponsored Stories and opt out if they desire, a court document said.
If it receives final approval, the proposed settlement would resolve a 2011 lawsuit originally filed by five Facebook Inc members.
The lawsuit alleged the Sponsored Stories feature violated California law by publicizing users’ “likes” of certain advertisers without paying them or giving them a way to opt out. The case involved over 100 million potential class members.
A spokesman for Facebook said the company was “pleased that the court has granted preliminary approval of the proposed settlement.” Lawyers for the plaintiffs weren’t immediately available for comment Monday evening.
Outside groups and class members will have a chance to object to the latest settlement before Seeborg decides whether to grant final approval. A hearing on the fairness of the deal has been set for June 28, 2013. The case in U.S. District Court, Northern District of California is Angel Fraley et al., individually and on behalf of all others similarly situated vs. Facebook Inc, 11-cv-1726.
(Reporting by Jessica Dye; Editing by Michael Perry)
Tech News Headlines – Yahoo! News
Matt Damon, Alec Baldwin, Don Cheadle Sign on for James Cameron’s Climate-Change Doc
Label: LifestyleLOS ANGELES (TheWrap.com) – James Cameron‘s climate-change documentary “Years of Living Dangerously” has lined up some high-level talent to get its message across. Matt Damon, Alec Baldwin and Don Cheadle have signed on to narrate the documentary, Showtime – which will air the project over multiple episodes next year – said Monday.
Actor Edward Norton is also expected to come aboard, Showtime said, with additional talent to be announced.
As previously reported exclusively by TheWrap, Cameron is teaming with producer and noted philanthropist Jerry Weintraub on the project, which will report on first-person accounts of people who’ve been affected by global warming. Cameron and Weintraub will executive “Years of Living Dangerously,” along with Arnold Schwarzenegger.la
“60 Minutes” producers Joel Bach and David Gelber are also executive-producing, along with climate expert Daniel Abbasi.
“The recent devastation on the East Coast is a tragic reminder of the direct link between our daily lives and climate change,” Showtime Networks’ president of entertainment David Nevins said. “This series presents a unique opportunity to combine the large-scale filmmaking styles of James Cameron, Jerry Weintraub and Arnold Schwarzenegger – arguably some of Hollywood’s biggest movie makers – with the hard-hitting, intimate journalism of ’60 Minutes’ veterans Joel Bach and David Gelber. I believe this combination will make for a thought-provoking television event.”
“We’ll make it exciting,” added Cameron. “We’ll make it investigative. We’ll bring people the truth. And people are always hungry for the truth.”
In addition to the narrators, “Years of Living Dangerously” will use reporting from the field, with New York Times journalists Thomas Friedman and Nicholas Kristof, columnist Mark Bittman and MSNBC host Chris Hayes.
“Years of Living Dangerously” will air over six to eight one-hour episodes, Showtime said.
Movies News Headlines – Yahoo! News
NFL-Kansas City Chiefs murder/suicide key may never be unlocked
Label: Health* Player’s death adds to recent NFL suicides
* Player head injuries seen as ongoing problem
* Experts wonder if drugs such as steroids involved
Dec 3 (Reuters) – The murder/suicide committed on Saturday by Kansas City Chiefs football player Jovan Belcher left the National Football League, its fans and health professionals struggling to understand what drove him to do it.
Belcher, 25, shot and killed his 22-year-old girlfriend Kasandra Perkins, the mother of his three-month-old daughter, in front of his own mother at home before driving to Arrowhead Stadium where he shot himself dead in the parking lot after thanking team officials for all they had done for him.
For the NFL, arguably the most popular U.S. professional sport, the tragic shootings cast the league in a frightfully brutal light as Belcher became the fourth player this year to die of a self-inflicted gunshot.
Former players Junior Seau in May, Ray Easterling in April and Michael Current in January all committed suicide.
A fifth suicide victim, former Chicago Bears player Dave Duerson killed himself by gunshot less than two years ago, leaving a note requesting that his brain be examined for a post-concussive disease that might have led to his severe depression.
An brain analysis showed that Duerson had a degenerative brain disease, as he had believed.
Details on Belcher’s health have been slow to emerge.
Dr. Alan Hilfer, Director of Psychology at Maimonides Medical Center in New York, said just why Belcher suddenly snapped could remain a mystery.
“We may never know the reasons,” Hilfer told Reuters in a telephone interview on Monday. “Something was terribly wrong.”
The league has come under fire from former players who have joined to sue the NFL, claiming league officials looked the other way while the players were absorbing concussions that have led to long-term disabilities.
LOOKING FOR AN EDGE
Others suspect that the high-speed, muscular contact game leads players to look for a doping edge despite drug testing, and that can lead to psychological instability.
Chiefs Chairman Clark Hunt said Sunday that doctors and coaches told him they knew of no physical or emotional issues bothering Belcher, who reached the NFL as a free agent after going to the University of Maine.
“What do you look for? It’s a very hard question to answer,” Hilfer said. “Certainly you look for mood changes. Certainly you look for increased levels of impulsively and anger.
“These things sometimes occur so suddenly. Sometimes there is just no way you could possibly know that someone is going to perpetrate an act of violence of this magnitude.”
Don Hooton, who founded the Taylor Hooton Foundation to promote steroids education in 2004, seven months after his son, Taylor, committed suicide following his use of anabolic steroids, suspects doping.
“Every time I hear a story like this, my mind runs immediately to anabolic steroids,” Hooton said. “Not necessarily to the exclusion of anything else, but because anabolic steroids can affect the mind in these crazy ways.
“I hope when they do the autopsy on this young man, that they look for these substances because it’s possible that what we saw was ‘Roid Rage’” – a label given to the exhibition of anger among steroid users.
Hooton said that despite efforts in professional leagues to stem the use of performance-enhancing drugs (PED), recent studies showed that steroids use was on the rise among U.S. school children.
“It’s not getting better – it’s getting worse,” said Hooton. “We better wake up, America.”
LARGER SOCIETAL PROBLEMS
Dan Lebowitz, executive director of Sport in Society at Northeastern University, said he saw the Belcher tragedy as something that speaks to societal problems transcending sports.
“This is an issue of men’s violence against women, not just football players being too violent,” Lebowitz said.
“When I look at it, I try to take it out of the realm of sport. I just think about the way we acculturate young boys in this country and our whole view of manhood.”
Lebowitz’s group has worked for the NFL on a 2010 training program aimed at gender equality and respect in the workplace, and ran a training project at the soccer World Cup in South Africa on preventing gender violence.
“If you look at how many NFL players commit gender violence in proportion to the overall population, the percentage falls in line with the general population, three to five percent.
“From what I hear she came home from a concert late and he reacted horrifically. We don’t have a healthy concept of what manhood is and how certain things that we see as an affront to manhood probably aren’t that at all.”
Lebowitz said the awful incident could spawn an opportunity to educate others.
“Nothing happens in a bubble. This is the fifth NFL player to commit suicide by a self-inflicted gunshot … this one was (preceded) by a murder. Right now there is an absolute heightened spotlight on all the issues around sports in general.
“How do we make a healthier sport, and how do we make a healthier man? How do we engage in a real conversation about respect for women’s rights and freedoms?”
Dr. Hilfer said athletes were often reluctant to seek help.
“They can benefit from additional help, especially considering the rash of suicides from concussive syndromes,” he said. “I would have loved to get this guy into some form of counseling therapy.
“It would have been wonderful if they could ask for help but athletes are often reluctant because their image is that of a tough guy who can handle things. They are as a rule some of the people who are least likely to access mental health services.”
Mike Paul, who runs a New York public relations business specializing in reputation management, said the incident would challenge NFL Commissioner Roger Goodell.
“This is a big one for him,” Paul told Reuters. “The helmet (safety) issue and the steroids and PED issue, continue. Now it is right back in his face again and he has two choices.
“He can confront it head on and say it is time for further examination as we go into 2013 … or he can try to slide it under the rug by saying it’s a one-off.
“I think it would be a big mistake to say it was a one-off.” (Editing by Philip Barbara)
Medications/Drugs News Headlines – Yahoo! News
EDF extends nuclear plants’ life
Label: Business4 December 2012 Last updated at 02:15 ET
EDF Energy is extending the operational life of two of its UK nuclear power stations by seven years.
Hinkley Point B in Somerset, and Hunterston B in North Ayrshire, are now expected to remain operational until 2023. Both had been due to cease generation in 2016.
Two other nuclear plants, Heysham in Lancashire, and Hartlepool had their life extended by two years in 2010.
EDF also hopes to build a new power station at the Hinkley Point site.
Last month it took the first step towards that goal when its subsidiary NNB Generation Company was granted a nuclear site licence by the Office for Nuclear Regulation.
The licence means the company has developed the required plans, procedures and structures to build a new power station.
However, the government still needs to give the go-ahead before it can be built. A permit is also required from the Environment Agency.
BBC News – Business
Gunmen assassinate peasant leader in Paraguay
Label: WorldASUNCION, Paraguay (AP) — Gunmen murdered one of the surviving leaders of a peasant movement whose land dispute with a powerful politician prompted the end of Fernando Lugo‘s presidency last June.
Vidal Vega, 48, was hit four times early Saturday by bullets from a 12-gauge shotgun and a .38-caliber revolver fired by two unidentified men who sped away on a motorcycle, according to an official report prepared at the police headquarters in the provincial capital of Curuguaty.
A friend, Mario Espinola, told The Associated Press that Vega was shot down when he stepped outside to feed his farm animals.
Vega was among the public faces of a commission of landless peasants from the settlement of Yby Pyta, which means Red Dirt in their native Guarani language.
He had lobbied the government for many years to redistribute some of the ranchland that Colorado Party Sen. Blas Riquelme began occupying in the 1960s.
By last May, the peasants finally lost patience and moved onto the land. A firefight during their eviction on June 15 killed 11 peasants and six police officers, prompting the Colorado Party and other leading parties to vote Lugo out of office for allegedly mismanaging the dispute.
Twelve suspects, nearly all of them peasants from Yby Pyta, have been jailed without formal charges since then on suspicion of murdering the officers, seizing property and resisting authority. The prosecutor had six months to develop the case and will present his findings Dec. 16.
Vega was expected to be a witness at the criminal trial, since he was among the few leaders who weren’t killed in the clash or jailed afterward.
He wasn’t charged because he was away getting supplies when the violence erupted at the settlement erected by the peasants inside Riquelme’s ranch, the Naranjaty Commission’s secretary, Martina Paredes, told the AP.
“We think he was assassinated by hit men who were sent, we don’t know by whom, perhaps to frighten us and frustrate our fight to recover the state lands that were illegally taken by Riquelme,” she said.
Riquelme, who died of natural causes about a month after the battle in June, occupied the land during the dictatorship of Alfredo Stroessner, whose government gave away land for free to anyone willing to put it to productive use.
A local court in Curuguaty upheld Riquelme’s claim to the land years later. Lugo’s government later sought to overturn the decision, but the case remains tied up in court.
Latin America News Headlines – Yahoo! News
Olly Murs tops UK single and album charts
Label: LifestyleLONDON (Reuters) – Singer Olly Murs‘s single “Troublemaker“, featuring U.S. rapper Flo Rida, retained the No. 1 spot in Britain’s pop charts for a second week in a row on Sunday, the Official Charts Company said.
“Troublemaker” is Murs’s fourth No. 1 single in the British charts.
The former contestant on the British version of television talent show ‘The X Factor’ also nabbed the top spot in the album charts with ‘Right Place Right Time’, leaving popular boy band One Direction in second place.
(Reporting by Alessandra Prentice; Editing by Louise Ireland)
Music News Headlines – Yahoo! News
Novo Nordisk insulin Ryzodeg passes Japan review
Label: HealthCOPENHAGEN (Reuters) – Denmark‘s Novo Nordisk, the world’s biggest insulin producer, said on Monday its Ryzodeg insulin had passed the first review by an advisory committee to the health ministry in Japan.
Novo Nordisk said in a statement it expected to receive marketing authorization for the treatment from the Ministry within a few months.
Price negotiations for another insulin, degludec, continued and were expected to be completed in the first quarter of 2013, the company said in the statement, adding the exact launch timing for Ryzodeg would be decided after a price listing for degludec.
(Reporting by Copenhagen Newsroom; Editing by Hans-Juergen Peters)
Health News Headlines – Yahoo! News
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