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December 8, 2022

Accounting News Roundup: KPMG Puts Silvercorp in the Clear; Groupon Hits the Road; Romney’s Fair-weather Flat Tax Fandom | 10.24.11

Swiss Banks May Pay Billions to U.S., Disclose Client Names [Bloomberg]
Swiss banks will likely settle a sweeping U.S. probe of offshore tax evasion by paying billions of dollars and handing over names of thousands of Americans who have secret accounts, according to two people familiar with the matter. U.S. and Swiss officials are concluding negotiations on a civil settlement amid U.S. criminal probes of 11 financial institutions, including Credit Suisse Group AG (CSGN), suspected of helping American clients hide money from the Internal Revenue Service, according to five people with knowledge of the talks who declined tause they are confidential.

Silvercorp says KPMG report shows books are clean [Reuters]
Anonymous short sellers had accused Silvercorp of inflating earnings and the size of its mineral resources, among other allegations, sending the company’s stock price as low as C$5.81 in September. The shares remain below an April high, but they have recovered to levels before the allegations were made public. The company, which operates silver mines in China, has denied all the allegations against it, describing them as part of a “short and distort” scheme. Silvercorp said the KPMG report showed its financial records to be substantially correct.

Olympus scandal: KPMG quit over Gyrus accounts [Telegraph]
Olympus has been in crisis since its former chief executive, Michael Woodford, revealed that $687m (£431m) in “fees” had been paid to two companies in the Cayman Islands during the purchase of Gyrus. Gyrus documents show that years before Mr Woodford’s revelations, accountants from KPMG flagged up “circumstances connected with our resignation that should be brought to the attention of the company’s members or creditors”.

Auditors In China: A Whole Lot of Posturing Going On [Forbes]
FM: “[A]ll this posturing is preposterous.”

Groupon Takes to the Road [WSJ]
The road show for the Chicago Internet firm’s upcoming initial public offering begins on Monday. In a roadshow, company executives try to convince mostly institutional investors such as mutual funds to buy a company’s shares. The roadshow for the daily deals company will focus on the Eastern seaboard the first week, with stops in New York on Monday, the Mid-Atlantic region on Tuesday, and Boston on Wednesday, according to an email reviewed by The Wall Street Journal that was sent Friday by an executive director of institutional equity sales at a bank to potential buyers of the shares. Then the show returns to New York on Thursday and Friday, the email says.


Perry to pin his hopes on ‘flat tax’ [FT]
Mr Perry, who has struggled to get his footing in the race for the Republican presidential nomination, is likely to argue that the flat tax is the best way to jolt the nation’s sluggish growth. Flat tax proponents say it would unleash private capital through a lower top tax rate and better incentives for savings and investment rather than consumption. The political case for the flat tax is its potential appeal to conservative primary and caucus voters, who are scheduled to kick off the voting in Iowa in little more than two months. The idea of abolishing the “progressive” tax system has been high on the wish list for many rightwing policymakers since the 1980s, but it has never caught on with mainstream voters.

Romney, Once a Critic, Hedges on Flat-Tax Plans [NYT]
As several leading Republican presidential candidates embrace a flat tax as a core campaign position, one contender stands out in not doing so: Mitt Romney, who has a long record of criticizing such plans and famously derided Steve Forbes’s 1996 proposal as a “tax cut for fat cats.” Lately, though, his tone has been more positive. “I love a flat tax,” he said in August. Flat-tax plans have come and gone before, and analysts note that they have tended to lose support once they come under scrutiny. But Mr. Romney’s support of the concept of a flat tax underscores the tightrope he is walking as taxes become a larger focus of the Republican presidential race and he faces rivals’ accusations of inconsistency on the issues.

Swiss Banks May Pay Billions to U.S., Disclose Client Names [Bloomberg]
Swiss banks will likely settle a sweeping U.S. probe of offshore tax evasion by paying billions of dollars and handing over names of thousands of Americans who have secret accounts, according to two people familiar with the matter. U.S. and Swiss officials are concluding negotiations on a civil settlement amid U.S. criminal probes of 11 financial institutions, including Credit Suisse Group AG (CSGN), suspected of helping American clients hide money from the Internal Revenue Service, according to five people with knowledge of the talks who declined to speak publicly because they are confidential.

Silvercorp says KPMG report shows books are clean [Reuters]
Anonymous short sellers had accused Silvercorp of inflating earnings and the size of its mineral resources, among other allegations, sending the company’s stock price as low as C$5.81 in September. The shares remain below an April high, but they have recovered to levels before the allegations were made public. The company, which operates silver mines in China, has denied all the allegations against it, describing them as part of a “short and distort” scheme. Silvercorp said the KPMG report showed its financial records to be substantially correct.

Olympus scandal: KPMG quit over Gyrus accounts [Telegraph]
Olympus has been in crisis since its former chief executive, Michael Woodford, revealed that $687m (£431m) in “fees” had been paid to two companies in the Cayman Islands during the purchase of Gyrus. Gyrus documents show that years before Mr Woodford’s revelations, accountants from KPMG flagged up “circumstances connected with our resignation that should be brought to the attention of the company’s members or creditors”.

Auditors In China: A Whole Lot of Posturing Going On [Forbes]
FM: “[A]ll this posturing is preposterous.”

Groupon Takes to the Road [WSJ]
The road show for the Chicago Internet firm’s upcoming initial public offering begins on Monday. In a roadshow, company executives try to convince mostly institutional investors such as mutual funds to buy a company’s shares. The roadshow for the daily deals company will focus on the Eastern seaboard the first week, with stops in New York on Monday, the Mid-Atlantic region on Tuesday, and Boston on Wednesday, according to an email reviewed by The Wall Street Journal that was sent Friday by an executive director of institutional equity sales at a bank to potential buyers of the shares. Then the show returns to New York on Thursday and Friday, the email says.


Perry to pin his hopes on ‘flat tax’ [FT]
Mr Perry, who has struggled to get his footing in the race for the Republican presidential nomination, is likely to argue that the flat tax is the best way to jolt the nation’s sluggish growth. Flat tax proponents say it would unleash private capital through a lower top tax rate and better incentives for savings and investment rather than consumption. The political case for the flat tax is its potential appeal to conservative primary and caucus voters, who are scheduled to kick off the voting in Iowa in little more than two months. The idea of abolishing the “progressive” tax system has been high on the wish list for many rightwing policymakers since the 1980s, but it has never caught on with mainstream voters.

Romney, Once a Critic, Hedges on Flat-Tax Plans [NYT]
As several leading Republican presidential candidates embrace a flat tax as a core campaign position, one contender stands out in not doing so: Mitt Romney, who has a long record of criticizing such plans and famously derided Steve Forbes’s 1996 proposal as a “tax cut for fat cats.” Lately, though, his tone has been more positive. “I love a flat tax,” he said in August. Flat-tax plans have come and gone before, and analysts note that they have tended to lose support once they come under scrutiny. But Mr. Romney’s support of the concept of a flat tax underscores the tightrope he is walking as taxes become a larger focus of the Republican presidential race and he faces rivals’ accusations of inconsistency on the issues.

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