I don't understand how they kept getting signed off audited finanicals when the company was clearly in trouble. Is there no recourse against the auditors in these instances? Otherwise an audit opinion is not worth the paper it's written on.
Admittedly the Yahoo Finance figures will be stale but assets must have taken a huge hit this past quarter for this to be happening. Either that or nothing but losses as far as the eye can see into the future.
"The (Audit) committee considered that the Company's EBITDA performance over the past year has been adversely affected by factors beyond management's control (specifically, the continued challenging gold environment) and the Company's decision to invest in future growth opportunities, and noted that the need to formulate and execute strategic plans to address and adapt to those continuing challenges created a continuing, if not enhanced, need for the unique expertise and services provided by Madison Park."
I never understand why if the company does badly it's due to factors outside Management control and yet when things go well it's because of the genius of Management in positioning the company.
Surely Management has misread the tealeaves in making strategic decisions that resulted in poor EZPW performance and as such should hold their hands up to making a mistake. Instead the Audit committee seems to be saying that Management made strategic decisions that have put the company in a bad position which has made it even more crucial that incumbent Management be retained and compensated at the top end of possible range.
I am long and frustrated.
"Item 1.01 - Entry into a Material Definitive Agreement
On October 9, 2013, EZCORP, Inc. (the "Company"), and Madison Park, LLC ("Madison Park"), a business and financial advisory firm wholly-owned by Phillip E. Cohen, the beneficial owner of all of the Company's outstanding Class B Voting Common Stock, agreed to extend the Company's engagement of Madison Park for an additional year (through September 30, 2014) on the same terms and conditions (including those relating to fees and expenses) as applicable to the fiscal 2013 engagement..............In exchange for those services, the Company will continue to pay Madison Park a retainer fee of $600,000 per month and will reimburse Madison Park for its out-of-pocket expenses incurred in connection with the engagement. "
At least the fees didn't go up.
If TSTC is trading again doesn't that imply that they have submitted the necessary docs to the exchange to bring them back in compliance?
Shouldn't there be some kind of news release by Inv Relations or the like regarding this? I haven't seen anything though.
From the FORM NT 10-Q
On April 2, 2013, Telestone Technologies Corporation (the “Company”) filed a Form 12b-25 (the “Original 12b-25”), disclosing that it was still in the process of compiling the information required to be presented in its Annual Report on Form 10-K for the year ended December 31, 2012 (the “2012 10-K”) and would be unable to file the 2012 10-K within the prescribed period. In Part II of the Original 12b-25, the Company marked the box indicating that the 2012 10-K would be filed within the fifteen calendar-day grace period. On April 17, 2013, the Company amended the Original 12b-25 to disclose that it was unable file the 2012 10-K within the grace period due to delays in obtaining certain necessary financial records from its Sichuan Ruideng subsidiary (the “Subsidiary Records Issue”). The Company further disclosed that after the Subsidiary Records Issue was rectified, the Company should be able to complete the preparation of the 2012 10-K. To date, the Company has not been able to obtain the records from the Sichuan Ruideng subsidiary. The reason for this is that the prior owners of the subsidiary, who are also tasked with its management, have refused to deliver the records to the Company headquarters. The Company is currently evaluating its options for resolving this matter.
Until it resolves this matter, the Company will not be able to file the 2012 Form 10-K or the Form 10-Q for the quarter ended March 31, 2013 (the “Form 10-Q”). The Company plans to file the 2012 Form 10-K and the Form 10-Q after this issue is rectified, which is likely to occur after the five-day grace period.
If TSTC does turn out to be a fraud then surely the Auditors who have merrily signed off the annual accounts must open themselves up to liability.
Thanks for this info. I recently visited their website and they haven't updated their English news section in quite a while.
From your post this is a bit concerning given the market cap of TSTC:
"[2013-02-05] Telestone donated 1 million for charity"
I'm assuming that's not USD but given the performance of the company they are in no position to make any donations.
I don't understand how the financials continue to get signed off, or it isn't raised as an audit note, given what tjpsimone2003 has said above. Is this specifically addressed addressed by the auditors anywhere?
Does anyone know how the bad debt writedown was calculated? If the vast amount of debts relate to the Big3 telecoms then presumably the vast majority of the write downs relate to them as well.
If the S&P 500 is done by market cap how come Big Lots with a market cap of approx $2bn is in while Sears, with over $5bn market cap, just got dumped?
Is there a danger that Big Lots will get dropped too?
There may be a very good reason and I just don't understand why S&P 500 components are dropped.
I'm surprised the market hasn't reacted to this news. Is it the lack of detail? Presumably the Chinese based solars like TSL will be the major winners.
Even with a 50% writeoff of receivables and no value on future business/cash flows the current share price still represents a great return.
Others though would put 0 value at receivables recovery and 0 value of future business.