Global Asset & Auto Finance Survey 2014

Errington quoted in recent Quarterly Survey on Finance in Asia.

“Basic research into equipment leasing globally shows a clear path where the industry is headed in emerging markets of Asia, why therefore are banks and finance companies such as Macquarie and CIT pulling out of many Asian countries?……

assetautofinancesurvey2014

Troubled Waters for the Big 4 in China

big-4-logos

Conducting business in China has never been a straight forward proposition no matter if you are an SME or a multi-national or one of the world’s largest Audit companies.

At the end of January, the US courts ruled that the Big 4 affiliates in China were banned from operating for 6 months. The judges ruling is quite an eye opener on Private Equity and Capital market transactions in China, most especially the reliability of the big 4 auditing accuracy! Transactions in this market worth billions of Dollars rely on the audits providing data that reflects the companies involved and their trading positions. This is now very much in question.

The Big Four are appealing the decision and whilst under review they are allowed to continue operating in China. The SEC had requested data on some Chinese companies quoted in the US but the Big 4 had refused on a number of occasions over the last 2 years stating that it would breach Chinese state secrecy laws.

The growth of KPMG China and Ernst & Young China have been unprecedented but PWC underwent the largest growth with staff numbers increasing four fold to 8,000 people between 2004 and 2012.

In the Judges lengthy ruling he stated “A good faith effort to obey the law means a good faith effort to obey all law, not just the law that one wishes to follow”

One of the breaches in compliance has been the Sarbanes-Oxley regulations which has in fact helped the auditors bottom line in the US as it has increased the necessity for stricter compliance of clients which has resulted in an increase in the fees of the Big Four.

If the ban is upheld then companies such as P&G, Amazon and Nike may have to look for new auditors in China as they have large revenue bases there. Conducting business has never been straight forward but if the appeal is not successful then a large gap will be left in the market that would need to be filled by Chinese audit companies.

With such potential impact on the market and conducting business in China, it is quite amazing that this has not been reported more aggressively.

Connaught are pleased to announce a recently agreed strategic alliance with the Mongolia Fund.

The Fund seeks long term growth of capital through investing in the mining sector, mining services, processing, logistics and energy.

http://www.mongoliafund.com/Who_We_Are.html

The most recent project is the structuring of funds for Hertz Equipment Rental franchise in Ulaanbaatar (the capital of Mongolia)

As a country, Mongolia, has the world’s lowest population density but last year had the highest global GDP growth rate at 17%.

One of the world’s richest areas for natural resources the economy is heavily reliant on the mining industry and market sectors that support the mines.

Connaught are looking forward to expanding the investments of The Mongolia Fund in this emerging Asian market”

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