Chinese firms' missing $6 billion tests regulators' resolve

SHANGHAI/SINGAPORE (Reuters) - Cash is considered among the hardest assets for a company to fake, which is why the disappearance of a combined $6.1 billion from two Chinese companies has dumbfounded investors and forced regulators to take action.

Drugmaker Kangmei Pharmaceutical Co Ltd, a constituent of MSCI’s global indexes, in April said an “accounting error” led it to overstate cash in 2017 by 29.94 billion yuan ($4.4 billion). This month, Kangde Xin Composite Material Group Co Ltd, a producer of high-polymer materials, said its auditor could find no trace of the 12.21 billion yuan that it said it held in a bank deposit.

Regulators are investigating both cases and neither company has offered detailed explanations for the missing billions.

Weak governance has long been a black mark against mainland Chinese companies. Yet these cases have still stunned many investors as they involve straightforward cash, and because the sheer size of the disappearances is equivalent to more than half the two groups’ combined market capitalization before they disclosed the issues, triggering calls for tougher punishment for any corporate wrongdoing.

“If you tell me fish in a pond disappeared, I probably would buy the story… Tens of billions of deposits missing, that’s a bit unthinkable,” Liu Enqi, vice head of Bank of Nanjing Co Ltd, told Reuters. “If such things happened in the U.S., someone would be jailed.”

Pan Jiang, chief executive of asset manager Shanghai V-invest Co, said the cases were “beyond description”.

“If regulators just let bad guys walk away, it would be a huge blow to investor confidence,” he said.

Officials appear to be listening. China’s top securities regulator, Yi Huiman, told a conference on May 11 that “those who did bad things must pay the price”. The chairman of the China Securities Regulatory Commission (CSRC) also vowed to tighten scrutiny of corporate governance and push for tougher punishment.

Shi Donghui, a senior researcher at the Shanghai Stock Exchange, at a seminar this month said the bourse would “resolutely” delist any companies found to have seriously violated disclosure rules.

FAKING THE UNFAKABLE

Accounting issues take place the world over. When it comes to manipulation, common ploys include inflating asset values, faking customers and overstating money owed. Companies also face more straightforward crimes such as theft.

But cash, sitting in bank accounts, is low on that list. Any big-sum cash fraud would be tough to pull off without help from bankers or auditors, said accounting consultant Ma Junsheng.

Rose Zhang, a partner at Zhong Xi, an accounting firm that audits over 25 China-listed companies, said collusion was likely in cases of disappearing cash because “it is impossible for deposits to vanish out of the blue”.

Kangmei disclosed its issue on April 30 and has said almost nothing beyond its initial diagnosis of “accounting error”. It said China’s securities watchdog was investigating the matter. Kangmei’s auditor GP Certified Public Accountants was also put under investigation, according to local media reports and the auditor.

Kangde Xin also disclosed a CSRC probe. In a series of statements this month, it said it did not exclude the possibility that its cash was appropriated by controlling shareholder Kangde Group. It is also said it was seeking to sue deposit holder Bank of Beijing Co Ltd.

Kangde Group’s chairman, Zhong Yu, has been detained, the police said in a separate statement without elaborating.

https://www.reuters.com/article/us-china-stocks-regulation-analysis/chinese-firms-missing-6-billion-tests-regulators-resolve-idUSKCN1SN0OT?il=0

Coca Cola General Counsel sells shares

not a huge amount but worth mentioning for what officer it is-da lawyer.

https://www.secform4.com/insider-trading/21344.htm

Millennials are signing up for $600 ‘grief retreats’ with dancing, meditation and lake swimming.

‘Dead to me’ on Netflix is making grief less taboo, and so are these social outlets that help millennials cope with loss.

There’s no manual for navigating grief.

The new Netflix NFLX, -0.41% dramedy “Dead to Me” follows Jen (Christina Applegate), a widow from Laguna Beach, who is grappling with grief after her husband is killed in a hit-and-run. She finds herself at a retreat in Palm Springs with her support group sipping margaritas poolside, hitting on a fellow widower during a counseling session and letting loose at a karaoke session.

“I thought there was such a story to tell in giving an escape to people in that amount of pain,” Liz Feldman, the creator and executive producer of “Dead to Me,” tells MarketWatch. She sent the characters on the show to a grief retreat after conversations she had with grief counselors around the country, and based on her own experience with losing loved ones. “It’s an escape for a little bit, but you can’t escape grief,” said Feldman, 41. “It just finds its way back to you.”

Off-screen, millennials are writing their own way of dealing with loss with the help of grief retreats, social media and dinner parties where all of the guests have lost a loved one.

San Francisco-based Rachel Reichblum, 29, lost both of her parents within 14 months of each other. Her father passed away from brain cancer when she was 25. Her mother was diagnosed with the same form of brain cancer and passed away when Reichblum turned 28 and was about to get married.

“It’s not like there’s a packet, ‘Lost a parent? Here’s how you grieve,’ someone gives you,” Reichblum tells MarketWatch.

Finding people she could relate to was a struggle. She was the only one in her friend group who had experienced loss in her 20s, and she wanted a community of people her age she could relate to.

She discovered the blog turned book “Modern Loss,” which was created by Rebecca Soffer and Gabrielle Birkner, millennials who had both struggled with loss and wanted a resource that wasn’t overtly religious, too clinical or, as their blog describes, “cheesy.”

“Society doesn’t know how to handle grief. It wants you to move on quickly. It makes people uncomfortable, but it’s important to be in a space where your feelings are validated, not brushed under the rug because that will come back to bite you in the ass,” Reichblum says.

She went to grief retreat last year hosted by Soffer of “Modern Loss” and author Emily Rapp Black at The Kripalu Center For Yoga & Health, a nonprofit in the Berkshires in Massachusetts. The three-day package featured a combination of physical and mental exercises like “writing prompts,” hiking and yoga.

“We’re a let it all hang out crowd,” Soffer explains. “There will be humor in this. We will be laughing, and that’s okay.” The four day retreat, happening in July, costs $295 not including lodging (the starting price for a private room at Kripalu costs $185 per night including food, but guests are not obligated to stay on-site). Reichblum says she paid around $600 last year for the retreat and lodging.

Guests participated in writing sessions with prompts asking them to describe their favorite meal with a loved one they lost; or to recall a song or mantra that reminded them of the person close to them who passed away. Reichblum found the writing sessions to be the most therapeutic.

“I had become so fixated on losing stories about my parents. I thought I was going to forget them. It felt so overwhelming,” Reichblum said. “That exercise pulled out those anecdotes in a way that reassured me that they were still in me. They’re not always funny, they’re not always happy, but they feel like a hug.”

The experience motivated Reichblum to start a social conversation around grief. She created the Instagram page @ThatGoodGrief as a healing tool to post photos of her parents, inspirational quotes like, “Do what you can when you can (it’s not a race),” and things she wishes she told her mom and dad before they passed away.

It’s become her own photo journal, inviting others — 5,670 followers — to interact via her “Moving Through” InstaStory, which features the question: “What are you struggling to face without your person?” It lists dozens of responses, like “figuring out life without my husband,” or “that he won’t walk me down the aisle.” She also has posts advice like “6 ways to be a good grief partner.”

rest at link

https://www.marketwatch.com/story/millennials-are-signing-up-to-600-retreats-with-grief-dances-lake-swimming-and-creative-writing-to-deal-with-grief-2019-05-17?siteid=rss&rss=1

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