Reuters: Red Flags Revealed in Filings Linked to Cat Fraud

Reuters reported that a Chinese mining equipment company at the center of an alleged accounting fraud was also involved in a web of insider loans and asset transfers prior to its purchase by Caterpillar, citing public filings.

The article said that the transactions, while not illegal, should have sounded warnings about the company’s finances when the U.S. firm came calling last year, citing corporate governance experts.

Citing a source directly involved with the Caterpillar deal, Reuters reported that RSM Nelson Wheeler was ERA Mining Machinery Limited’s auditor, while Deloitte and Ernst & Young acted on Caterpillar’s side.

To read the full Reuters article click here.

Previously on monitordaily: CAT Uncovers ‘Misconduct’, Will Take $580MM Q4 Charge, published January 21, 2013

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