And Now Silver Birds Sues Its Extrernal Auditors

I am really pleased to see what's happening. The fraud in Silver Bird is simply massive and disgusting ( see The Said 12 Accounting Irregularities Found At Silver Bird! ) and Bursa Malaysia, too should be more active in cracking down all these book cookers! Too see the current board of Silver Bird slapping lawsuits againts its former directors ( see Silver Bird Sues Its Former Directors ) is something other companies should consider if ever another fraud case should happen. File criminal chrages against them crooks and slap them silly with mega lawsuits. Ensure that white collar crimes does not pay!

Today, on SunDaily Business: http://www.thesundaily.my/news/453704

Woah! Yet another lawsuit. Intersting!

• Crowe Horwath denies Silver Bird’s claims
  Posted on 2 August 2012 - 11:20pm
  Last updated on 3 August 2012 - 02:06am
  
  sunbiz@thesundaily.com
  
  PETALING JAYA (Aug 2, 2012): Crowe Horwath has "categorically denied" claims filed in a lawsuit by Silver Bird Group Bhd that it was negligent and had breached a duty of care as the group's external auditor for failure to discover and/or detect the financial irregularities in the group.
  
  Crowe Horwath was the external auditor of Silver Bird when news of the financial irregularities surfaced in February last year. It had then refused to provide a basis for an audit opinion to the bread maker's financial report for the year ended Oct 31, 2011.
  
  "Crowe Horwath categorically denies these allegations and firmly believes that it had discharged its duties and responsibilities as the auditors of Silver Bird Group in accordance with approved auditing standards. According to the engagement partner, Onn Kien Hoe, the financial irregularities were in fact discovered by Crowe Horwath and were immediately reported by us to the audit committee and board of directors of Silver Bird. We have also proactively informed the relevant authorities thereafter," it said in a statement today.
  
  Silver Bird and its subsidiaries, Stanson Marketing Sdn Bhd and Standard Confectionery Sdn Bhd, had on Wednesday filed a suit against Crowe Horwath and nine others alleging, among others, negligence and breach of duty of care.
  
  "We believe that the suit by Silver Bird Group is frivolous in nature and without basis. We strongly believe that we have fully discharged our duties professionally and will vigorously defend our position in court," said Crowe Horwath.

Facebook has no friends..

On CNN: http://buzz.money.cnn.com/2012/08/02/facebook-stock-fidelity/?iid=Popular

• Facebook has no friends: Stock slides below $20
  By Hibah YousufAugust 2, 2012: 2:52 PM ET
  
  Facebook is not very popular among investors these days. Shares of the social media giant hit a new low of just $19.82 Thursday, nearly 50% below their initial offering price.
  
  The stock has been under pressure since last week, when Facebook (FB) reported its first earnings as a public company, and failed to relieve investor worries about slowing sales growth and its plan for mobile advertising.
  
  As Facebook's stock continues to bleed, institutional investors are beginning to unload their stakes. Fidelity Investments, which owns both public and private shares of Facebook, sold more than 1.9 million public shares in June across 21 different mutual funds, according to Morningstar data.
  
  Of those 21 funds, 16 dumped more than 25% of their Facebook stakes, including the Fidelity Puritan fund (FPURX), which still owns 1.9 million shares. The Fidelity Disciplined Equity fund (FDEQX) sold almost 50% of its Facebook stock.
  
  Of course, more than a dozen Fidelity funds also added shares of Facebook in June -- about 2.2 million shares combined -- including the Fidelity Contradfund (FCNTX), which boosted its stake by 264,000 shares, or almost 2%.
  
  While Fidelity declined to comment on Facebook specifically, the firm's spokesman Stephen Austin said "portfolio managers make investment decisions every day for what they believe is in the best long-term interests of their funds' shareholders."
  
  Meanwhile, a number of JPMorgan (JPM) mutual funds and a handful of funds managed by Turner Investment Partners sold significant parts of their stake in Facebook in June, according to Morningstar.
  
  Facebook's stint as a public company has been rocky since day one, when a trading glitch at the Nasdaq (NDAQ) turned its public debut into a public fiasco.
  
  Even prior to that botched first impression, investors and analysts alike have been questioning how the company will bring in more revenue from its 955 million users, particularly through its mobile platform which is becoming increasingly popular but lacks a strong advertising strategy.

Could it drop below $12.00?

ps: I think it could happen and when it happens, would you be interested in buying?

Feature Article: Making A Killing On Manchester United

Source: http://www.orlandosentinel.com/sports/nationworld/sns-rt-us-manchesterunited-ipobre871081-20120801,0,1408065.story

• Analysis: Glazers may make a killing on Man Utd investment 1:09 a.m. EDT, August 2, 2012
  
  (Reuters) - Manchester United Ltd's owners stand to make about three times their investment in the British soccer club if it successfully goes public.
  
  The club, one of the most popular in the world, has kicked off the marketing for its U.S. initial public offering, which will value the club at $3.3 billion if the sale is at the high end of the pricing range of $16-to-$20 per share.
  
  The owners, the Glazer family, bought the team for 790 million pounds ($1.2 billion) in 2005 in a leveraged buyout. In terms of equity, the Florida-based family, whose other interests include shopping centers and the Tampa Bay Buccaneers football team, has invested at least 521.1 million pounds ($813.7 million) in Manchester United.
  
  Through the IPO, they will initially get up to $167 million from their sale of 8.3 million shares. They will also still own 89.8 percent of the shares, which will be worth nearly $3 billion at a $20 a share price. The Glazers have already received a 10 million pound dividend, which was used to pay back money they borrowed from the club in 2008.
  
  The huge profit for the family could make Manchester United the latest poster child for potential problems faced by companies that become targets of leveraged buyouts. To critics, such deals load companies with debt to supercharge the owners' profits, while sometimes leaving the companies worse off than they were before.
  
  The risk may be greater for a sports team, where finances can turn on how well the team does on the field, which can depend on a club having enough money to buy and pay top players.
  
  Poor performance can quickly feed through to lower revenue from ticket sales and TV rights, and eventually hurt commercial revenue from sponsorships and sales of merchandise, such as team shirts.
  
  Manchester United, which was debt-free before the Glazers bought it, had 437 million pounds ($682 million) of debt as of June 30.
  
  Fans of the 134-year-old team have long reviled the Glazers, worrying that reduced financial flexibility because of the debt would come at the expense of investment in players and the team's performance.
  
  Their dissatisfaction with the Glazers has only grown after the team, English champions a record 19 times, failed to win a trophy last season for the first time since 2005.
  
  Manchester United Supporters Trust, a group of almost 180,000 fans, plans a mass mail campaign against the IPO.
  
  "From the Manchester United Supporters' Trust point of view, we want to send a message to U.S. banks that this IPO is very unpopular, and they should not underwrite it," said Sean Bones, 52, a member of the group who describes himself as a life-long fan of the club.
  
  "We see the Glazers as using the club as a cash cow, and this IPO is milking time," Bones said.
  
  A Manchester United spokeswoman declined to comment for this article or on the Glazers' behalf. The Glazers could not be reached through the Buccaneers either.
  
  GREAT EXPECTATIONS
  
  There is no guarantee that the Glazers will be able to reap a big return. Manchester United is betting that it will be able to command an exceptionally high valuation, but investors and bankers said achieving that number could be a reach.
  
  At an IPO price of $20 per share, Manchester United's enterprise value would be 8 times revenue, rivaling one of the richest sports deals in recent years.
  
  Earlier this year, a group spearheaded by former basketball great Earvin "Magic" Johnson paid 8.3 times revenue to buy the U.S. baseball team, the Los Angeles Dodgers, according to a source familiar with the situation. The $2 billion price for that deal marked the largest sum ever spent for a major league U.S. sport franchise.
  
  Looked at another way, Manchester United will be valued at around 26 times its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the 12 months through June 30.
  
  Traditional media companies, which the company's bankers are trying to pit it against, trade at much lower multiples. Walt Disney Co, for example, trades at around 10 times its trailing 12-month EBITDA, according to Thomson Reuters data. The Madison Square Garden Co, which owns the New York Knicks basketball team and the Rangers hockey team, trades at roughly 11 times its trailing 12-month EBITDA.
  
  "Manchester United is probably the crown jewel of sports franchises, but even it shouldn't get the valuation it's seeking here," said Josef Schuster, who helps manage $2.5 billion for Chicago-based financial services firm IPOX Schuster.
  
  The owner's valuation expectation was one reason why Morgan Stanley dropped out of the underwriting syndicate, sources familiar with the situation told Reuters last month.
  
  WEAKENED FINANCES
  
  The company's latest financials, disclosed in an amended U.S. Securities and Exchange Commission filing on Monday, also paint a picture of a club with money problems.
  
  By June 30, 2010, the Glazers had seen their equity in the club wiped out as losses piled up over the years, and injected 249.1 million pounds in November that year to pay down expensive debt.
  
  While the club projects its profit for the fiscal year ended June 30 will climb 62 percent to 77 percent, this was the result of a tax credit, without which it would have posted a loss.
  
  Moreover, its revenues are volatile and depend on how well the team does.
  
  Broadcast revenue, which accounts for about a third of the club's overall revenue, comes from contracts with the Premier League and Champions League, and payments depend on the number of matches for broadcast. Similarly, the team's match day revenue, which also accounts for a third of overall revenue, depends on the number of games it plays.
  
  In the fiscal year ended June 30, Manchester United's match day revenue is expected to fall 11 percent to 12 percent because the team played four home games less in the most recent season when compared with the previous one. Broadcast revenue is seen down 11 percent to 13 percent.
  
  To be sure, it is not all doom and gloom for the club. A seven-year club jersey sponsorship deal with General Motors Co, starting in 2014, will be a consistent source of revenue for the team. The deal is worth roughly $600 million.
  
  In Manchester United's roadshow, which has been posted on the internet, executives argue that the team is in the early stages of making more money off the strength of its brand around the globe. Emerging markets in particular comprise a valuable commercial opportunity for the franchise, the team's management says.
  
  "It's a global media company that participates in the most watched sport in the world. Investors don't have easy access to a company like that," said Michael Obuchowski, a portfolio manager with North Shore Asset Management in Cold Spring Harbor, New York.
  
  Still, investors face a lot of risks.
  
  Potential investors are "buying equity in something that is already heavily leveraged and doesn't have a sustainable profit," said Bob Boland, a professor of sports management at New York University. "This is like buying a piece of land with a mortgage already on it."
  
  (Reporting By Olivia Oran in New York; Additional reporting by Keith Weir in London; Editing by Paritosh Bansal, Martin Howell and Leslie Gevirtz)

Silver Bird Sues Its Former Directors

Another lawsuit has been filed. This time it is Silver Bird who is suing its former excutive directors.

http://www.thesundaily.my/news/452680

• Silver Bird sues former executives for RM125m fraud Posted on 1 August 2012 - 11:42pm
  Last updated on 2 August 2012 - 02:16am
  
  PETALING JAYA (Aug 1, 2012): Silver Bird Group Bhd and its subsidiaries, Stanson Marketing Sdn Bhd and Standard Confectionery Sdn Bhd, have lodged a lawsuit against its former group managing director, executive director and eight others alleging, among others, breach of fiduciary duties, breach of duty of fidelity and loyalty, abuse of power, conspiracy to commit fraud and for facilitating misappropriation of funds.
  
  The bread maker filed the RM125 million suit in the Kuala Lumpur High Court yesterday, and case management is fixed for Sept 3.
  
  The suit claims Datuk Jackson Tan Han Kook, Ching Siew Cheong and Lai Poh Mei had breached their fiduciary duties as group managing director, executive director and general manager of accounts and finance of the three companies, respectively, and is seeking to collect damages caused by their action to be assessed.
  
  The suit is also seeking a declaration that one of its defendants — Asia Food Link Sdn Bhd — had allegedly made fictitious sales of sweetened creamers amounting to RM44.287 million to Stanson Marketing and as such, it is not entitled to claim the sum of RM44.188 million from it.
  
  A declaration is also sought that the purported purchase of machinery for a new bread line by Lai from Triremis (M) Sdn Bhd and Triremis Asia Sdn Bhd for RM25.8 million is fictitious and non-existent.
  
  Asia Food, Triremis (M), Triremis Asia and Bill Davis & Associates Sdn Bhd are also alleged to have knowingly received payment out of the funds of Silver Bird and its subsidiaries, which were misappropriated by Tan, Ching and Lai in breach of the duties owed to the the three companies, among others.
  
  Apart from the seven defendants, the suit is also seeking a declaration that external auditor Crowe Horwath and internal auditors — Audex Governance Sdn Bhd and Focus Internal Audit Solutions — had conspired to defraud Silver Bird, Stanson Marketing and Standard Confectionery in reckless disregard of the interests and/or to injure the interests of the three companies.
  
  "The company will make the necessary announcements on further developments of the matter as and when necessary," said Silver Bird in a filing with Bursa Malaysia yesterday.
  
  On Tuesday, Ching had taken legal action against Silver Bird and its directors for alleged wrongful termination from the group and is seeking damages for alleged slander against him.
  
  However, in his statement of claim served to Silver Bird, Ching had clearly admitted that he, in his capacity as then executive director, had "dressed up" the financial accounts of Stanson Group from 2003 till 2010, albeit allegedly under the instructions of Tan, who he stated had a gambling addiction.
  In one paragraph, Ching had admitted to inflating the assets of Stanson Group by some RM31 million and by adjusting a combined loss of RM15 million for the period 2002-2004 to a profit of RM16 million.
  
  He further stated that the "dressing up" of the accounts was divided between himself and other senior management staff.
  

This is a good development. Sue them for fraud!

Olympics Badminton: 8 Kicked Out For Playing To Lose

Best news from the Olympics. Well done!

From BBC:  http://www.bbc.co.uk/sport/0/olympics/19072677

• Olympics badminton: Eight women disqualified from doubles
  
  Eight badminton players have been disqualified from the women's doubles competition after being accused of "not using one's best efforts to win".
  
  Two pairs from South Korea and one each from China and Indonesia made a series of basic errors in Tuesday's matches.
  
  All four pairs were accused of wanting to lose, in an attempt to manipulate the draw for the knockout stage.
  
  A South Korean appeal was rejected by the Badminton World Federation, while Indonesia withdrew an appeal.
  
  As well as the "not using best efforts" charge, the players were also accused of "conducting oneself in a manner that is clearly abusive or detrimental to the sport".

It was such a shame to see them playing to lose. Utterly disgusting and disgraceful.

See also: http://www.huffingtonpost.com/2012/08/01/badminton-olympics-disqualified-lose-matches_n_1727640.html

Bintai Revises Its Net Profits!

Holy cow!

On Star Biz: http://biz.thestar.com.my/news/story.asp?file=/2012/8/1/business/11770298&sec=business

• Wednesday August 1, 2012
  Bintai revises net profit
  
  A hefty RM26.6mil deducted on additional impairment loss
  
  PETALING JAYA: Bintai Kinden Corp Bhd has made a huge adjustment to its audited net profit after tax for the financial year ended March 31, 2012 after recording an additional impairment loss on receivables of RM26.6mil.
  
  The company told Bursa Malaysia that its audited net profit after tax for financial year 2011 was RM101,000 instead of RM26.7mil as stated in the unaudited financial statements in May.
  
  Bintai Kinden explained that there was additional impairment loss on receivables, namely from Desa Konsep Sdn Bhd and KBK Dubai LLC, based on the latest information and developments.
  
  “Based on this, the board of directors had on July 25 resolved that additional provisioning should be made accordingly for the said receivables,” said the company.
  
  Bintai Kinden provides mechanical and electrical engineering services for infrastructure and building projects, and operates in Malaysia, Singapore and Vietnam.
  
  In March, the company announced that its 70%-owned subsidiary Bintai Kindenko Pte Ltd (BKPL) had, via a joint venture with Samsung C&T Corp, won S$166.2mil (RM416.6mil) worth of jobs from the Singapore Land Transport and Authority for the republic's Downtown Line Stage 3 rail infrastructure project.
  
  Samsung C&T has a 60% stake in the joint venture, with the balance held by BKPL.
  

This is incredible!

From a net profit of 26.7 million revised to 101k????

Like this also can?

More Silver Bird Drama

Yet more drama.

On Star Biz:

• Wednesday August 1, 2012
  Ex-director sues Silver Bird
  PETALING JAYA: Silver Bird Group Bhd has been served a writ of summons by former executive director Ching Siew Cheong via the Kuala Lumpur High Court. Ching was suspended on April 30 after the company’s AGM.
  
  He was suspended together with managing director Datuk Jackson Tan Han Kook and general manager of accounts and finance Lai Poh Mai to facilitate an internal investigation of accounting irregularities in the company.
  
  Ching is claiming loss of salary amounting to RM90,000 from the date of termination, along with RM600,000 in damages for wrongful termination of employment. He is also claiming RM2mil in losses, which resulted from force-selling Silver Bird shares as a result of what he claimed was mismanagement on the board’s part and the company going into PN17 status.
  
  However, the company said in a filing to Bursa Malaysia that the claims were frivolous and not substantiated in the circumstances surrounding the financial irregularities. Silver Bird’s board said this would not have any financial or operational impact as such claims were envisaged to be restructured pursuant to the pending regularisation plan.
  
  News of the bread and confectionary maker’s financial irregularities came about in February after its independent auditors Crowe Horwath refused to provide a basis for an audit opinion to the group’s financial report for the financial year ended Oct 31, 2012.
  
  The auditors said their stand was based on the poor keeping and inability to verify sales transactions. Since then the company had defaulted on loans to both creditors and banks. Silver Bird’s distribution agreement for prepaid cards with Maxis Bhd, which was one the company’s main sources of revenue, was terminated.
  
  The board formed an inquiry committee, and PKF Advisory Sdn Bhd was appointed to conduct a forensic investigation of the company. The results of the forensic investigation detailed 12 key areas of financial irregularities in the group.
  

Commentary On Ambang Sehati's Potential Offer for BRDB

Star Biz has an interesting perspective on Ambang Sehati's offer on  BRDB: http://biz.thestar.com.my/news/story.asp?file=/2012/8/1/business/11769743&sec=business

Do refer also to yesterday posting: Ambang Sehati To Make A GO for Bandar Raya?

• Wednesday August 1, 2012
  Can there be a time when too much disclosure is bad for the market? Raison D'etre - Risen Jayaseelan
  
  CAN there ever be a time when too much disclosure is bad for the market? One instance where that question crops up every now and then relates to companies that disclose “indicative” takeover prices.
  
  Bandar Raya Developments Bhd's (BRDB) announcement on Monday that its substantial shareholder Ambang Sehati Sdn Bhd was finalising a takeover of the former, comes to mind.
  
  The announcement said that Ambang Sehati had informed BRDB that it (Ambang Sehati) was finalising the financing and approvals necessary to make a general offer for the shares of BRDB.
  
  BRDB went on to say that Ambang Sehati had informed that its indicative offer price for the planned takeover was at RM2.90 per BDRB share.
  
  Needless to say that has got a bunch of speculators jumping on the stock, moving it up by 16 sen to close at RM2.69 yesterday.
  Here's the complication what happens if Ambang Sehati does not go ahead with the general offer? That is always a possibility, considering that Ambang Sehati merely said that it was finalising funding and approvals for the deal.
  
  Can punters then argue that BRDB had misled the market by providing that indicative pricing? Would it have been better for BRDB to omit the indicative offer price in its announcement?
  
  Clearly, BRDB's announcement was in the spirit of full disclosure. The board had decided to disclose that information after it received it, which is the way things are supposed to work in our full disclosure-based regime.
  
  (What is also noteworthy is that Ambang Sehati's latest move of planning a general offer for the shares in BRDB is a significant improvement from what it had earlier planned to do, which was to buy the assets directly.)
  
  The issue with indicative price disclosures had reared its ugly head before in the case of an attempted takeover of KNM Group Bhd in 2010. The buyers had made a conditional offer to buy the assets and liabilities of the company at an indicative price of RM3.5bil, which worked out to be 90 sen per KNM share.
  
  Naturally believing that there was some kind of “floor pricing” in place, some investors bought into the stock. The takeover deal fell through after the due diligence and the punters lost their shirts.
  
  Conspiracy theorists are apt to go further and claim that disclosing indicative prices of potential takeovers is an attempt to mislead the market or to create a false market for the shares.
  
  Perhaps one way to address the problem is to prohibit companies from disclosing these so-called “indicative offer prices” until the offer is actually made.
  
  That, however, is against the concept of full disclosure.
  
  If there are parties related to the potential buyer who are taking advantage of the indicative offer pricing in place by selling their shares, then that's a different matter for the authorities to investigate.
  
  To merely ban the disclosure of indicative offer pricing information isn't the way to deal with that. It will lead to unnecessary complications. And where would we draw the line? Should the company even be disallowed from disclosing the planned method of takeover, considering different methods of takeovers appeal to different investors?
  
  BRDB's board therefore has done what was necessary.
  
  Punters betting that the general offer for BRDB's shares by Ambang Sehati would be made at RM2.90 or more, must accept the risk that the takeover may not materialise for whatever reason. Better for the buyer to beware than for information flow to be hindered.
  
  News editor Risen Jayaseelan reckons that general offers are always the “cleanest” and fairest ways for listed companies to be bought out.