Library

Industrials

China Energy Savings Technology Inc. (CESV US)

Year: 2005

China Energy Savings Technology (CESV) listed in the US via a 2004 reverse merger. The company was engaged in three scandals: First, a number of directors and connected parties artificially inflated trading volumes with the aim of listing on the NASDAQ. Second, CESV acquired a 35% stake in Starway Management for HK$731m in February 2005; however, a Hong Kong listed company disclosed that it was going to be selling this stake to Skyworth for just HK$52m in May 2005. There was clearly a discrepancy between times and prices. Third, CESV appears to have fabricated profits as evidenced by the SEC's decision to censure Moore Stephens over its audit of the company's FY04 and FY05 financials. Our analysis suggests they had traits in line with past frauds, triggering our Fake Cash Flow Fraud model and Beneish's M-Score for profit manipulation. CESV is a confirmed fraud.

Last updated February 2022

The information on this page has been compiled from publicly available sources. GMT Research Limited has not verified the information and does not warrant its accuracy. Any claims made or views expressed are not necessarily those of GMT Research Limited.

lock03 Read More

Back