Accounting Fraud
http://fifthperson.com/confessions-of-an-s-chip-ceo/ Textile companies in China (cyclical company) This story has been circulating around since April 2009 but we thought it was such a good read and contained so many valuable lessons that we decided to share it once more here. The story below is from an email purportedly written by a former S-chip CEO. If you’re not already familiar, S-chips are Chinese companies listed on the Singapore Stock Exchange and notorious for corporate scandals including embezzlement, forgery and accounting fraud. While it’s wrong to assume that all S-chips have accounting issues, this story (along with some juicy bits about KTV bars and nightclubs) reveals how innocent investors are sold the investment potential of an S-chip, invest their hard-earned money, only to later discover that the stock is worth nothing. The authenticity of this story can’t be proven but it still highlights the importance of always being on your guard against characters wh