As we’ve discussed, Silvercorp Metals hasn’t appreciated the anonymous letters floating around the Series of Tubes accusing the Canadian miner of accounting fraud and has stated that, save their assets in China, “this wouldn’t be happening.” What the company would really like is for these jerks to show themselves and cooperate with investigators. But until that happens, Silvercorp hired KPMG to poke around to calm all the fears out there. According to reports, the House of Klynveld will have a report out soon but in the meantime, Silvercorp CEO Feng Rui will address everyone who thinks that his company is just a bunch of Tonka trucks in a sandbox:
“We’re a real company and will fight against shorters and distorters,” Feng Rui, Silvercorp chief executive officer, said today at a meeting in Beijing.
Furthermore, the auditors in this matter, Ernst & Young, have carried out their duties to a T and if you think some bullshit letters are going to cause them (or Feng & Co.) to do things differently, you’d be wrong:
“Our auditing doesn’t have anything wrong, the allegations are fabrication,” Feng said today in an interview on the sidelines of the meeting.[…] “The allegations won’t prompt us to make any changes in the process of financial reporting and auditing,” he said
Frankly, it’s embarrassing that they even have to address this but you’ve given them no choice.
A couple of weeks ago, Silvercorp Metals responded to an anonymous letter that alleged that the company was engaged in some dodgy accounting practices. Understandably, the company was irked by this little stunt, responding that it was complete BS and due to some short-sellers trying to take advantage of the rash of sketchy accounting scandals involving companies that have a connection to China.
Now, a second anonymous letter has appeared and the company is again going on a PR offensive to calm everyone down because, really you guys, nothing is fucked here and that these reptiles need to come out and start cooperating with investigators if they’re really concerned about things outside their wallets. And so everyone gets the message loud and clear, this was not delivered by some everyday flak but by the Chairman of the company, Dr. Rui Feng:
“I ask shareholders to exercise common sense in assessing whether these allegations of “fraud” against the Company have any merit whatsoever in the face of very significant revenues, tax payments and dividends, and particularly when the accusations are made anonymously by parties whose only interest is in depressing the Company’s share price. I invite the authors of the anonymous allegations to come out of the shadows and participate with the regulators in their investigations, if their concerns truly extend beyond the profitability of their short positions.”
Furthermore, the company’s independent committee has engaged a KPMG Forensic team to help get to the bottom of this. And they certainly know the traits of fraudsters when they see them. Everyone just chill out.
[via Silvercorp Metals]
As we’ve discussed, companies listed on North American stock exchanges that happen to have ties to China haven’t faired too well. The problem? Some dodgy accounting and disclosures. It’s caused a lot of angst amongst investors and there was enough concern that someone actually decided to wake up the PCAOB and SEC to let them know that something might not quite right over there.
Today’s news that Silvercorp Metals, a Canadian mining company who happens to do some work in China, is the subject of a letter that is making the rounds alleging accounting fraud probably doesn’t come as a surprise to anyone but it sure has irked the hell out of the company.
The allegations against Silvercorp are “entirely bogus,” Lorne Waldman, a Silvercorp spokesman, said today in a telephone interview. “If we didn’t have assets in China this wouldn’t be happening.”
And while they’re at it, the company will have you know that they were not created in a one those so-called reverse mergers that have everyone sketched out.
Waldman denied the mining company was created in a so- called reverse takeover, as was Sino-Forest. He said that Silvercorp’s auditor is Ernst & Young LLP, the same firm that audited Sino-Forest’s financial statements.
Oh, right. Ernst & Young. There’s no cause for concern since they’ve seen this before so they’ll probably just sit tight to see what happens. The silver lining for Silvercorp is that Roddy Boyd has written anything about them. Yet.