In January 2013, Caterpillar announced a $580 million write down on its acquisition of ERA Mining and Machinery Ltd., a PRC-based company listed in Hong Kong. The write-down represented 86% of the value of the transaction and was required after Caterpillar discovered a “deliberate, multi-year, coordinated accounting misconduct” and other problems. At the time of the acquisition, Caterpillar had been in China for 30 years and had experience doing business in some of the most difficult places around the globe.
Please join CALOBA for our panel discussion, “Due Diligence on China-based Companies.” Performing proper due diligence on the target company is a critical part of any investment, joint venture, outsourcing or acquisition transaction. When dealing with a China-based company, it is critical be familiar with particular China-specific issues that may arise. Our panel, featuring three CALOBA board members, Alan, Jim and Yabo, and experienced Fenwick litigator Jay Pomerantz, will discuss and share their own experiences regarding special considerations when conducting due diligence on a China-based company.
Topics will include regulatory approvals, permits and licenses, property issues, ownership of the entity, accounting and financial reporting, management background, employee issues, asset verification, contracts and FCPA among others. We will also discuss the latest administrative law decision regarding five accounting firms in China and its impact. We anticipate a lively discussion and hope you will join us!