Suchergebnisse

• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 28: EM.TV (Germany, 2000)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …, they were fast becoming a cautionary tale for new-economy hubris. In 2001, they were charged with defraud- ing shareholders. The extent of their fall… …expected a rising demand for their programs. And EM.TV sales grew at an explosive rate when Haffa spun deal after deal with the most famous players in the… …world of entertainment. Haffa showed that his prized German programs could make it everywhere else on the Continent. For example, the hit cartoon… …early 2000, shortly after a capital increase, EM.TV started an acquisition spree. For example, in February 2000, it acquired the Jim Henson Company… …, maker of the Muppets, for EUR 660 million. The following month, EM.TV purchased a 50% interest in SLEC, the entity controlling the Formula One Group… …, for about EUR 1.6 billion. Perhaps caught in the thrill of the markets, Thomas Haffa boldly stated: “I am 48. When I am 50, I will buy Disney.”… …good. There is nothing negative to report.” In early December 2000, EM.TV finally announced a profit forecast for 2000 which was only EUR 25 million… …attorney’s Munich office began its criminal investigations against the brothers. In April 2001, EM.TV had to announce a loss of EUR 1.4 billion for 2000… …forecast.” Haffa added that he would have never expected that it would be possible to be charged in a criminal court. In pleading for their acquittal… …executed verbal contract”. On April 8, 2003, the brothers were both found guilty. Prosecutors were not suc- cessful in their attempt for an eight month…

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  Case 29: Infomatec (Germany, 2000)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …Harlos and Alexander Haefele, were among the first board members of a corporation from the Neuer Markt to be arrested for allegations of fraud… …fictitious large-scale orders. For example, in May 1999, at the peak of the new-economy bubble, Infomatec published an ad-hoc-disclosure, announcing the… …million”. However, the con- tract with Mobilcom was far from “at least” EUR 28 million, and it turned out later that the contract was worth less than EUR 5… …. Harlos and Haefele did not properly describe that these were negotiations for a contract, and instead used terms such as “order from Mobilcom” and… …ad-hoc-disclosures are by no means intended only for an investment and sector-specialized audience, but rather for all present or potential investors and… …shareholders. The disclosures have a particular importance for both groups, since at the time of the notification only management has the details of this… …for the first time that members of the management board of a public corporation can be held personally liable to shareholders for intentionally issuing… …misleading public releases. For example, in one case, a relatively unsophisticated investor had pur- chased 230 Infomatec shares at a total expense of EUR… …causes damage to another person in violation of “accepted moral standards” is liable for the damage. The BGH emphasized that publishing materially… …, therefore, accepted moral standards for purposes of the Civil Code. The BGH ordered Harlos and Haefele to repurchase the Infomatec shares from the plaintiff…

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  Case 30: Lernout & Hauspie Speech Products (Belgium, 2000)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …hundreds of disgruntled investors who lined up for the opening of the nation’s biggest fraud trial, seeking to get their money back. “Lernout & Hauspie… …Speech Products N.V.” (L&H), once one of Europe’s high- tech stars, had filed for bankruptcy protection back in 2000, after admitting to wide- spread… …him. The duo based their company in Lernout’s Flemish hometown of Ieper. (Flanders, Belgium’s Dutch-speaking region, seemed to be a good spot for the… …glittering future. And with a particularly promising software product for speech recognition, the company’s finances, as reported, reflected success. In 1996… …commissioned a special midyear audit by L&H’s regular auditor, KPMG. On November 9, 2000, L&H announced that it would revise financial statements for 2… …co-founders, resigned as co- chairmen, and trading of L&H stock was suspended. On November 29, 2000, the company filed for bankruptcy protection after an… …transactions with two unconsolidated Belgian entities, Dictation Consor- tium N.V. and BTG N.V. These two companies were formed specifically for the purpose of… …otherwise would not have resulted in reported revenue until the projects resulted in marketed products). For example, within one day of its creation in… …with another venture it helped start, Brussels Translation Group N.V. (“BTG”), this time to develop software for auto- matic translation from one… …develop variants of its basic software for non-mainstream languages such as Hindi, Farsi, Turkish and Armenian. In actuality, the LDCs were little more…

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  Case 31: Bankgesellschaft Berlin (Germany, 2001)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …, with the accompanying problems, become so clearly visible. Politicians sat on the bank’s board for decades, and control of the bank’s activities was… …have a recipe for sleaze.” Bankgesellschaft Berlin (BGB) was founded in 1994 by unifying several credit institutes formerly controlled by the… …mix of businesses made it difficult for the supervisory board of the parent institution to maintain control and insist on clear risk reporting from… …were not just businessmen, but old CDU colleagues who had sat alongside him in parliament for many years. Then it came to light that Landowsky had… …the assignment of shares in various real estate funds (the so-called “VIP funds”), with which the entire risk was removed for each investor. The… …investors kept their guaranteed rental incomes for 25 years and afterwards were ensured a right to resell their shares to BGB at the original price. Thus… …real estate risks that were not properly measured or managed. There were worries about the potential for mounting losses from the real estate portfolio… …property-linked portfolio. When BGB belatedly reported its official figures for 2000 in July 2001, it had to reveal a startling EUR 1.65 billion loss. It also… …in order to cover newly discovered risks from the real estate business. Thus, BGB (which originally was meant to be “a world-class bank for a… …world-class city”) became a huge and costly embarrassment not just for Berlin, but for Germany as a whole. The recapitalisation of the bank blew a hole in…

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  Case 32: Comroad (Germany, 2002)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …Accounting Fraud in European Companies 190 Case 32: Comroad (Germany, 2002) For audacity and scale, few cases of accounting fraud can match… …heavyweight banks offering credits, international auditors signing off its accounts, and respectable analysts touting its shares. Yet for much of the time… …EUR 43.9 million for calendar years 1998, 1999 and 2000, respectively. However, by late summer 2001, Comroad began issuing shareholder letters to… …unpleasant for the shareholders. Recommendation: Sell.” On the same day, in a rebuttal letter to shareholders, Comroad responded to these accusations… …: “Readers of this article will inevitably get the impression that Comroad is a start-up, waiting for its first auditor’s certificate. In fact, our auditors… …have no qualms in awaiting the certificate for 2001.” On February 19, 2002 (approximately one month before a scheduled analyst con- ference at which… …spokesperson, KPMG stated that “there were justified doubts about the trustworthiness of Comroad”. The audit firm gave two reasons for resigning… …62.7% of revenues for 1999 and 1998, respec- tively, were also bogus as they were billings to VT Electronics Ltd. as well. Arguably in damage-control… …account- ing firm Roedl & Partner has presented a comprehensive final report on the special audit of Comroad AG for the years 1998–2000. The report confirms… …for which no evidence could be found of its existence. The existence of the revenues could not be substantiated.” Comroad’s listing on the Neuer Markt…

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  Case 33: Vivendi Universal (France, 2002)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …. Under Messier’s leadership, for example, Vivendi completed a USD 30 billion buyout of Canada’s Seagram and a USD 10 billion purchase of USA Networks Inc… …Companies 195 it had used them as collateral for a loan. However, it had tried to book the loan as revenue until the French stock market regulator… …over-expansion and too much debt. Furthermore, questions about Vivendi’s accounts had been asked for months. The company’s complex balance sheet was notoriously… …difficult to decipher; for example, many experts noted that it was hard to distinguish what debt belonged to the environment business and what belonged to… …accounting firm Arthur Andersen for advisory services, and both Enron and WorldCom had em- ployed Andersen as well. Eventually, Vivendi suffered a credit… …. Having announced a EUR 13.6 billion loss for 2001 (the biggest loss in French corporate history), the company was teetering on the edge of bankruptcy. In… …October 2002, the French public prosecutor opened an investigation against “X”, or persons unknown, for the publication of false balance sheets and false… …or misleading information on the prospects of Vivendi for the years 2000, 2001 and 2002. The investigation followed a complaint from a small French… …, hauling away boxes of docu- ments and electronic records. “The situation for Vivendi looks quite dangerous,” said a lawyer specialized in securities fraud… …negotiated before resigning in July 2002. In addition, Messier was prohibited from serving as an officer or director of a public company for 10 years. The…

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  Case 34: Royal Ahold (The Netherlands, 2003)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …the most prominent and re- spected corporations in the Netherlands. For several years, it had been named the most desirable employer and the company… …with the best reputation in the nation. Queen Beatrix had awarded the title “Royal” to the company, a designation re- served for Dutch companies that… …have operated continuously (and honourably) for 100 years. However, shortly after the turn of the century, a case of Enron-style accounting fraud… …purchased U.S. Foodservice (a large food wholesaler head- quartered in Columbia, Maryland) for USD 3.6 billion. To finance the growth-by- acquisition strategy… …earnings goals set for their individual units. However, with intense competition and the historically low profit margins in the food industry, these… …at USF centred around the way it accounted for “promotional allowances”. USF typically purchased products from a variety of suppliers at full price… …accounted for pro- motional allowances from suppliers. Food manufacturers have long offered dis- tributors and retailers payments for prime shelf space or… …. It’s almost a pay-for-play mentality. It’s something that’s been within the industry for many years,” said one retail expert. “But lately, retailers… …(like many others) did not have a systematic method of accounting for these allowances. The absence of proper internal controls provided an excellent… …by certain suppliers. Another common scheme was “front loading” allowances: if a supplier, for example, agreed to pay a USD 3 million promotional…

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  Case 37: Siemens (Germany, 2006)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …Accounting Fraud in European Companies 218 Case 37: Siemens (Germany, 2006) For over 160 years, Siemens has stood for technological… …excellence, innovation, quality and reliability. The Munich-based engineering giant has also been acclaimed for its publicly stated emphasis on good… …trated”. Siemens ended up paying USD 1.6 billion, the largest fine for bribery in modern corporate history. “The Siemens case is so shocking because… …Siemens is such a major player in Germany and has been for more than a century,” said Bruce Kogut, professor of strategy at INSEAD. “You think of the… …great German compa- nies, and Siemens is one of them. To find out that they knew about secret accounts that were used for paying bribes is stunning. This… …Switzerland sent requests for help to coun- terparts in Germany, submitting lists of suspect Siemens employees. German offi- cials decided to act in one… …from 1992 to 2005 and had led the company through most of the time relevant for the bribery system recently detected. Many shareholders were ask- ing… …said he was not giving up his post to take responsibility for the corruption investiga- tions that had heaped negative publicity on the company. “Despite… …number of managers and employees,” Pierer said. “The sole reason for my decision is to serve the best interests of Sie- mens.” Only several days after… …: USD 1.6 billion in fines and fees in Germany and the United States as well as more than USD 1 billion for the internal inquiry and related reforms…

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  Case 39: Seibu Railway (Japan, 2004)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …being the man who single-handedly brought the Winter Olympic Games to Na- gano in 1998 (which was also a boon for his ski resorts in the area). For… …its financial reports for the past five years. Under Japa- nese stock market rules, no listed company can be more than 80% owned by its 10 largest… …shareholders for more than one year. In violation of that rule that intends to ban highly concentrated ownership, Tsutsumi conspired with then Seibu Railway… …regulators had begun to investigate the shady stock sales. In June 2005, Tsutsumi pleaded guilty, apologizing for what he had done and acknowledging… …for four years. The judge said Tsutsumi was not sent to jail because he had already been socially ostracized. Seibu Railway said in a statement… …institutional investors for investment losses incurred due to the falsification of the financial reports and the scandalous delisting in 2004. The plaintiffs… …duty to correctly state key data in its annual financial reports. The Seibu Railway scandal was also the wake-up call for regulatory reform in… …version of the Sarbanes-Oxley Act. The new guidelines, informally known as “J-SOX”, were intended to make executives accountable for actions they take and… …(“Corporate responsibility for financial reports”) and 404 (“Management assessment of internal controls”). “The new guideline is a departure from the… …Koyanagi found hanged, www.japanaddicted.com, February 20, 2005 Japanese mogul arrested for fraud, www.news.bbc.co.uk, March 3, 2005 Japan arrests former…

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  Case 41: Livedoor (Japan, 2006)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …in Japan’s corporate history. Never before has a home-grown Japanese entrepreneur fallen so far and so fast as Takafumi Horie, the flamboyant… …33-year-old businessman who had turned his internet company Livedoor into a household name. For many younger Japanese, Horie represented a new model of… …tors, including people buying stock for the first time, because of Horie’s charis- matic appeal. As the author of several best-selling advice books (such… …Koizumi even asked him to run in the 2005 national election as a poster boy for economic reform. However, Horie also had a history of upbraiding… …only dream of. In 2005, Horie grabbed headlines when he started a hostile takeover bid (still rare in Japan) for Fuji TV, one of the country’s biggest… …price: the deal involved a publishing firm that Live- door apparently already owned. Livedoor had arranged for an investment group it controlled to buy… …under the pretext of swapping them for shares in two firms that Livedoor was targeting for takeover. However, the share swaps were bogus. Finally… …, Horie was accused of falsifying the company’s accounts. The alleged fraud centred on Livedoor’s group financial statements for the business year ending… …Accounting Fraud in Asian Companies 242 hours for three months because of capacity problems. The TSE announced to put Livedoor on monitoring status, and… …, in April 2006, Livedoor lost its listing. The TSE said the company had so far failed to clear up the suspicions that it had deceived investors…

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