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+--- Thread: Caterpillar writes off most of China deal after fraud (/thread-8564.html)
Caterpillar writes off most of China deal after fraud - chairman - 01-18-2013
(Reuters) - Caterpillar Inc uncovered "deliberate, multi-year, coordinated accounting misconduct" at a subsidiary of a Chinese company it acquired last summer, leading it to write off most of the value of the deal and wipe out half a quarter's profits.
Caterpillar, the world's largest maker of tractors and excavators, said on Friday it would take a noncash goodwill impairment charge of $580 million, or 87 cents per share, in the fourth quarter of 2012.
Analysts had expected the company to earn $1.70 per share in the fourth quarter, according to Thomson Reuters I/B/E/S.
Caterpillar closed the purchase of ERA Mining Machinery Ltd and its subsidiary Siwei last June, paying HK$5.06 billion, or $653.4 million at current exchange rates.
A member of the Caterpillar board during the course of the Siwei deal told Reuters the board was distracted at the time by a larger transaction and paid relatively little attention to the Siwei acquisition.
Re: Caterpillar writes off most of China deal after fraud - Watooka - 01-19-2013
The board should be dismissed and sued. They are the ones who allowed for the scam to be pulled on them.