Caterpillar Takes $580M Charge For China Accounting Scheme

Law360, New York (January 18, 2013, 10:10 PM EST) -- Caterpillar Inc.’s probe of a mining machinery company it acquired in 2012 revealed a years-long accounting scheme at its Chinese unit that overstated profits and will cost it a $580 million charge, the Illinois-based Machinery giant disclosed in a regulatory filing Friday.

The “deliberate” accounting misconduct occurred at Zhengzhou Siwei Mechanical & Electrical Manufacturing Co. Ltd., the Chinese unit of ERA Mining Machinery Ltd., which Caterpillar purchased last year. The firm characterized the $580 million amount as a “noncash goodwill impairment charge” that it will show...
To view the full article, register now.