Alibaba Group Holding Ltd (阿里巴巴), the Chinese e-commerce giant, yesterday said that it had discovered suspicious accounting at a Hong Kong film company that just two months ago it paid about US$800 million to control.
The disclosure could raise concerns that Alibaba, preparing what might be the biggest initial public offering (IPO) in US history, could be biting off more than it can chew in a spree of acquisitions.
The film company, Alibaba Pictures Group (阿里巴巴影業集團), formerly ChinaVision Media Group (文化中國傳播集團), yesterday said that it had discovered “possible non-compliant accounting treatments” involving insufficient provision for impairments on assets, or write-downs, which were not identified.
Photo: Bloomberg
The company added that it would miss an Aug. 31 deadline to release its earnings for the first half of this year and that its shares would be suspended from trading until its audit committee could complete an inquiry.
The accounting issues at Alibaba Pictures could lead to questions about whether Alibaba, which analysts expect could raise as much as US$20 billion in a New York IPO as early as next month, has been carrying out sufficient due diligence as it vets potential takeover targets.
For example, a deal in June to pay nearly US$200 million for a 50 percent stake in Guangzhou Evergrande Football Club (廣州恆大), a Chinese soccer team, was wrapped up in a matter of days after Alibaba’s executive chairman Jack Ma (馬雲) agreed to the investment while having drinks with Evergrande’s owner, a billionaire real-estate developer.
Alibaba agreed in March to purchase 60 percent of ChinaVision, which produces and distributes films and television programs in China, for HK$6.24 billion (US$805 million). The deal was completed in June. Alibaba renamed the company Alibaba Pictures and installed its own board of directors.
Last month, Alibaba Pictures issued a profit warning, saying that because of a drop in revenue, it expected to book a substantial loss for the first half of this year, compared with a profit of US$18 million seen for the same period last year.
The film unit also announced plans to work with respected Hong Kong director Wong Kar-wai (王家衛). Alibaba yesterday issued a vote of confidence in the film unit, describing it as the “flagship company” in its growing entertainment business.
Alibaba “fully supports the new management of Ali Pictures as they thoroughly review and rectify the possible financial noncompliance they have found with the former ChinaVision,” an Alibaba spokeswoman said in an e-mailed statement. “The new management team has a firm commitment to transparency, good corporate governance and investor protection, and the actions they have taken are consistent with this commitment.”
Alibaba Pictures said the potential accounting issues had been discovered by its new management as part of “an initial review of the company’s financial and business affairs.”
“The board’s audit committee has therefore begun a further inquiry into the matters concerned, in accordance with an action plan approved by the board to determine the cause, impact and extent of the relevant issues,” the film unit said. “It is currently uncertain how long the further inquiry will take.”
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last