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SFC warns on undervalued assets in M&As
Hong Kong’s Securities and Futures Commission warned
company directors and financial advisors to ensure assets
are properly valued in all mergers and acquisitions to protect
shareholders’ interests, or face penalties. Valuers who provide
materially false or misleading information may become liable, and
face a fine or court orders for investor compensation, the SFC said
in a statement. In its guidance note, the SFC reminded directors to
thoroughly investigate the value of the assets to be bought, and act
in the interests of the company.
Snap Inc.’s Q1 loss may have tax benefit
Snap Inc., the company behind the photo messaging app
Snapchat, reported a US$2.2 billion first quarter loss that will
likely lead to a tax reduction, reported The Wall Street Journal.
Around US$2 billion of the loss came in the form of a stock
compensation expense, where tens of millions of restricted shares
and stock options were issued to employees as a form of payment,
with the stock slated to vest once the company became public, the
Journal said. Given the difference between the price at the time
stock was granted and the market price when it was vested, Snap
would be eligible for a tax deduction, provided that employees
report the stock’s vesting value as income.
Sylvester Stallone to sue Warner Bros.
Hollywood action-star Sylvester Stallone announced that he will
file a lawsuit with his production company, Rogue Marble, against
Warner Bros. Entertainment for alleged breach of contract, unfair
business practices and accounting fraud in relation to his 1993 sci-fi
film Demolition Man. According to the lawsuit, Stallone believes
he is owed profits and accuses the film studio and entertainment
company of being “unfair, unlawful and offensive” and “know-
ingly playing fast and loose” with the film’s revenues. The lawsuit
also underlines a wider motive of reforming “Hollywood account-
ing” for the benefit of “all talent” in Hollywood, wrote USA Tod ay.
Warner Bros. did not yet respond to the suit.
Fujifilm postpones earnings announcement
Fujifilm announced that it has delayed its earnings announcement
for the year ended in March until it has the results of an
investigation into questionable accounting practices at its New
Zealand unit. The Japanese photography and imaging company
will set up a third-party panel of accountants and lawyers to look
into the validity of the subsidiary’s accounting, due to uncertainty
over lease transactions at Fuji Xerox New Zealand for the periods
prior to the financial year of 2015. The findings are scheduled to be
delivered to the company around mid-May, said Fujifilm.
May 2017 9
in Demolition man
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