Example Of Nueva Pescanova

Founders Michael “Mickey” Monus and David Shapira perpetrated financial fraud because there was conflict of interest involved with Monus supporting a World Basketball League with Phar-Mor’s revenue. With the help of the Chief Financial Officer (CFO) Patrick “Pat” Finn $10 million was hidden in World Basketball League that Monus had founded. This was done by overstating the company’s inventory and earnings. Also, within 10 years of establishment Phar-Mor had grown to 300 stores and 25,000 employees which resulted in Phar-Mor having to borrow millions to fund this growth (Bloomberg Business.1992)

Owners: The owner(s) are those who will have “full rights to manage every aspect of the organization” (Hubstaff Support 2014)

The manipulation of accounts fraud scheme is generally fulfilled by employees in top management positions and it usually involves making understatements or overstatements on financial statements making it very hard to detect. The process followed as Troy Adkins, (2015) explains is very simple. The financial statements are either overstated to show different figures in the earnings on the income statements making them look better than they actually are or the earnings in the current periods are manipulated in such a way that the revenue is understated or they inflate the current year’s expenses. The second process includes making the financial statements look worse than they are in reality. Deloitte, (2009) explains a number of ways which the accounts are manipulated where as one of the ways is to manipulate the reported earnings directly. They further explained that overstating the

“I don’t care about the girl! Do you have any idea what he will do to that company if he has full control?”

In the case of Phar-Mor fraud, the company was involved in cover up and some accounts were created to hide the fraudulent activities. Bad inventory counts in the stores were made to help with the cover up and deceit about activities that cost hundreds of millions of dollars. (Williams, S.L., 2011)

These equity listings are different from companies such as BP and Exxon. All subsidiary companies’ shares were held by the Group Holding Companies in the ratio of 60/40 (Royal Dutch/Shell). The corporate structure is outlined in the figure below.

There can be a number of reasons for a company to go public or private. There are benefits, as well as disadvantages that go along with either course of action (Exhibit 1 for details). When firms decide to go private, they are no longer listed on any stock exchange market. The pressure of keeping accounting regularity and reporting to the public is no longer an issue. Instead, firms can be more flexible to reorganize the business profile as well as the management team. In many cases, shareholders and board members receive very rewarding financial benefits from this transaction. However, in some situations, public firms do not have a choice in the matter, as is the case in a “hostile takeover”.

The company currently faces serious financial challenges. It was struggling with declining sales and increasing costs. Since 2004, revenues had fallen by more than 40% while costs especially for employees health insurance, maintenance, and utilities climbed. Credits and loans had been borrowed to

For instance, the funds owed the company by the Rigas family went undisclosed in the statements, because the management at Adelphia deemed such disclosure as being “unnecessary” (Barlaup, Hanne, & Stuart, 2009). Given that Adelphia was a publicly traded company, the purposeful non-disclosure caused potential investors to rely on financial records that were grossly misleading. The inevitable result was the investors continued to inject money into a company that had all the appearances of profitability and sustained growth, but that was, in reality, rapidly becoming insolvent. Moreover, lending institutions also relied on the “independently-audited” financial statements, and they were more than eager to loan the company money, given Adelphia’s presumed state of financial “profitability.”

This was a result of a major chance in business conditions, or assumption of too much financial risk by the issuer.

So investors should worry that Alibaba wouldn’t be share a significant amount of the value created with them over the time. Actually, lots of global public companies have a large shareholder with a lock on control, but normally controlling shareholders often won a substantial portion of the equity capital that provides them with beneficial incentives. In the case of Alibaba, investors need to worry about the relatively small stake held by the members of the controlling Alibaba Partnership (Bebchuk, 2014). All those factors shows Alibaba’s structure does not provide adequate protections to public investors. So investors expect Alibaba changes its Corporate Governance strategy, for instance Jack Ma need to reduce his stake in Alibaba within 5 years, including by having shares in Alibaba granted to Alibaba employees. It also should give more power to the shareholder’s to guarantee shareholder’s right which will seeks to allay investor concerns. If Alibaba change their strategy, giving its stockholders’ strong confidence, the business success of Alibaba might be large enough to make up for the costs of diversions and give public investors with good returns on their investment in the

In 2003, the threads holding Parmalat’s fraud together quickly began to unravel. To back up the existence of the Cayman Islands account’s funds, Parmalat had been using a letter allegedly written to them from the Bank of America to confirm that a transfer of the funds had been made. However, after brief scrutiny it was revealed that the letter had been forged, and so the funds did not exist. As the scandal was put under further scrutiny, it was revealed that Parmalat had not only been lying about the money in the subsidiary, but about various other assets as well. The accountants working for Parmalat had essentially invented assets out of thin air to offset their expenses and liabilities, and were lying about revenues as well. After thorough investigation it was determined that Parmalat was $17.6 billion* in debt. Trade of their stocks was immediately suspended.

Salomon transferred the debentures to Broderip in exchange for a loan. Salomon defaulted on payment of interest on the loan and Broderip sought to enforce the security against the company. Unsecured creditors tried to put

On January 7, 2009, Mr. Raju revealed the exact situation of the company by his latter toward the Board of Directors of Satyam Computers Limited that “he had been manipulating the company’s accounting numbers for years.” Mr. Raju

There are 4 group companies in the current structure. Following is a brief on all the companies as to what they do and what businesses they are into.