Financially fraudulent fortune cookies

I’ve written a bit on dodgy Chinese accounting and the risks for large scale write offs and worse. Seems that the big boys are also involved with fraudulent activity.

Reuters reports that “Subsidiaries of China’s second-largest energy company Sinopec inflated their 2014 revenue and costs by 20.2 billion yuan ($3.04 billion), according to a report published by China’s auditing department…Twelve subsidiaries of Sinopec Group, the parent of Sinopec Corp (0386.HK), have manipulated their financial reports by creating fake invoices of fuel sales, among other discrepancies.…The audit also showed Sinopec lost 1.29 billion yuan after it acquired a 49-percent stake in an overseas project, due to “insufficient assessment of risk factors…China’s national audit department reviewed the financials of the 10 largest state-owned companies including Aluminium Corporation of China (CHALCO), Sinopec and China National Offshore Oil Corporation (CNOOC), exposing huge losses in these firms as a result of low efficiency and bad investment decisions.”

Recall

China’s fixed asset investment is at 16 year lows

Peer to peer lenders are becoming insolvent

Is anyone paying anyone in China?

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s