October 29, 2014 Leave a comment
October 29, 2014 3 Comments
By Wong Kong Ki, James
On 23 October 2014, Tesco revealed the actual overstated profit as £263m after confessing its profit overstatement in September. This accounting scandal has caused UK’s largest retailer’s share price to plunge to an 11-year low (Neville, 2014). Tesco’s chairman Richard Broadbent has resigned and eight senior executives has been suspended. Financial Conduct Authority in UK has launched an official investigation into the case while Tesco is also running its internal review with Deloitte and Freshfields.
By Ng Yee Lok
Currently, it is not required that the names of shareholders who own and control have to be revealed under the “cloak of secrecy”. This encouraged establishments of anonymous shell companies to hide proceeds resulting from illegal activities such as corruption, tax evasion and money laundering.
This situation is currently under debate at the House of Commons. It is advocated that the “cloak of secrecy” should be lifted for the sake of outlawing the set up of shell companies for illegal purposes.
By Luk Fiona Fong Wah
The four-year dispute between the two Internet giants- Tencent Holdings Ltd. and Qihoo 360 Technology was finally settled in the Supreme People’s Court in China on 16th October 2014. The incident started when Tencent disallowed users with Qihoo’s 360 Safeguard installed from using QQ in 2010 (Caixin Online, 2014). The company was accused of violation of the PRC’s Anti-monopoly Law (AML) that harmed Qihoo’s businesses. Yet, the final appeal was being rejected. The court justified that the company did not dominate the market as the one-day ban had stirred up more active competition (i.e. a surge of 23 million users in QQ’s competitor- MSN) and the market has rather easy entry requirements (Xinhua Net, 2014).
By Pang Yuen Sang Selina
The Hong Kong Securities and Finance Commission (SFC) saw the apparent lack of rigorous undertaking pre-listing due diligence (Holman Fenwick Willan LLP, 2013) already for some time. On 12 December 2012, SFC announced in its consultation conclusions on the Hong Kong listing regime, hoping to drive companies to better perform up-to-standard due diligence acts by announcing new measures, that included the requirement of the companies ordinance (CO) to be amended.
October 29, 2014 2 Comments
By Wong Man To
A few days ago, a number of pending deals have been withdrawn, like the U.S. drugmaker AbbVie’s board has ceased $55billion deal to acquire Ireland’s Shire Inc (Bloomberg, 2014). The rationale behind is primarily the new U.S. tax law, introduced in late September this year, aiming at deterring tax benefit from “Inversion”.
October 29, 2014 1 Comment
By Chan Chi Lok
Auditors play a key role to assure the integrity and accuracy of the financial reports of the listed companies. Therefore, a robust regime is important for regulating the conduct and professional standards of auditors. However, the current regulatory regime is not consistent with the international standard. As a result, Hong Kong failed to join IFIAR, which is an influential regulatory international organization of auditors.
In 2014, Hong Kong Government proposes a reform on the power of Hong Kong Institute of Certified Public Accountants (HKICPA) and Financial Reporting Council (FRC).