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Page 1: NEWS - Hong Kong Institute of Certified Public …app1.hkicpa.org.hk/APLUS/2013/10/pdf/4-news.pdf · News agency poll of the corporate ... company Vodafone agreed last ... chase of

4 October 2013

NEWSTHE INSTITUTE

About 200 accounting professionals attended the Cross-straits, Hong Kong and Macau Accounting Profession Conference 2013 last month.

An 18-person delegation from the Institute, led by the president, Susanna Chiu, headed to Xining, Qinghai province, for the 8-9 September event.

The theme of this year’s conference was “culture and branding” and the three subthemes were “brand building,” “international networking” and “enhance-ment of cooperation.”

China’s assistant finance minister Yu Weiping delivered opening remarks to encourage further collaboration in the fields of accounting culture and branding of the accountancy profession.

Senior accounting professionals from the Mainland, Taiwan, Hong Kong and Macau also made speeches at the conference, sharing their experiences about the marketing of individual accounting firms and the profession in general and the development of global networks as well as opportunities for cross-boundary and international cooperation.

This was the eighth edition of the conference, which concluded with a resolu-tion to convene next year’s meeting in Macau.

The conference was presided over by Chen Yugui, vice president and secretary-general of the Chinese Institute of CPAs.

Cross-straits conference addresses branding issuesDelegates gather in Qinghai for annual event

Disciplinary findings (continued)

Disciplinary findingsHo Chun Shing, CPA (practising) and CCIF CPA Limited Complaint: Failure or neglect to observe, main-tain or otherwise apply section 100 Introduction and Fundamental Principles and section 130 Professional Competence and Due Care of the Code of Ethics for Professional Accountants.

Ho is one of the practising directors of the corporate practice. The Institute received in-formation from the Financial Reporting Council about alleged deficiencies in certain audit areas in relation to an audit of a listed company by the corporate practice. Ho signed the relevant audit report on behalf of the corporate practice. After considering the information available, the Insti-tute lodged complaints against the respondents under section 34(1)(a)(vi) of the Professional Ac-countants Ordinance.

Decision and reasons: Ho and the corporate practice were reprimanded and each of them was ordered to pay to the Institute a penalty of HK$60,000. In addition, Ho and the corporate practice were also ordered to pay HK$1,030,000 towards the costs of the disciplinary proceed-ings. When making its decision, the Disciplinary Committee took into consideration the particu-lars in support of the complaints, the nature of breaches and opinions of expert witnesses on technical accounting and auditing matters.

Chung Wai Shun, Wilson, CPA (practising)Complaint: Refusal or neglect to comply with a direction lawfully given to him by the Council un-der section 18B of the Professional Accountants Ordinance.

Chung is a practising member of the Institute. In March 2011, the Institute received information from a third party alleging improprieties in pro-fessional services undertaken by Chung for a pri-vate company. He failed to respond adequately to the enquiries made by the Institute’s compli-ance department. The Council issued a direction to Chung under section 18B of the Professional Accountants Ordinance on 16 February 2012, requiring him to provide an explanation to the Institute on certain matters pertaining to the al-leged improprieties. Chung failed to provide the explanation. After considering the information available, the Institute lodged a complaint against Chung under section 34(1)(a)(ix) of the ordinance.

Decision and reasons: Chung’s name was removed from the register for a period of six months with effect from 13 September.

The Disciplinary Committee had originally made an order to reprimand Chung conditional upon him providing to the Institute, within 30 days, certain outstanding information pertaining to the third party’s complaint. Upon Chung’s default in fulfilling the condition, the reprimand was replaced with a sanction of removal pursuant to the committee’s order.

Chung was also ordered to pay to the Institute a penalty of HK$80,000 and the costs of the disciplinary proceedings of HK$78,116.

In making its order, the Disciplinary Committee noted the difficulty that the Institute and the committee had had in contacting Chung and getting him to respond, and that he was not forthwith in cooperating with the Institute. The committee considered that this is a serious case of failure to comply with a Coun-cil direction, while noting on the other hand that Chung had not been found to have committed misconduct before and had admitted to the complaint.

Details of the disciplinary findings are available at the Institute’s website: www.hkicpa.org.hk.

ObituaryThe Institute notes with regret the passing of Laurence Gerald Chung.

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NEWSINTERNATIONAL

6 October 2013

Leaders of the Group of 20 major economies last month agreed on a list of measures to improve the state of the economy, including a renewed emphasis on creat-ing jobs rather than restricting deficits.

A 27-page joint statement from the G-20 meeting, held from 5-6 September in St. Peters-burg, also outlined further steps to crack down on multinational companies that avoid paying any

or only pay minimal taxes.A possible slowdown in

developing countries and volatile financial markets were also at the top of the agenda for the an-nual meeting, which highlighted a list of concerns, including weak growth and persistently high unemployment, financial market fragmentation, insuf-ficient private investment, high public debt and volatility of capital flows.

Prior to the meeting, leaders of five of the largest emerging economies – Brazil, Russia, India, China and South Africa – issued a joint statement stressing their concerns about the unintended harmful effects of policy actions by central banks of developed nations.

“The eventual normalization of monetary policies needs to be effectively and carefully calibrat-ed and clearly communicated,”

the statement read, a reference to the withdrawal this year of the cash that flooded global markets from 2008.

Russian president Vladimir Putin announced that the five na-tions agreed to create a US$100 billion reserve fund to steady currency markets and act as an alternative to the International Monetary Fund system, the state-owned Rossiyskaya Gazeta newspaper in Moscow reported.

Japan rowover plan to lift sales tax

The Japanese government ap-pears set to raise the national sales tax rate in April in a bid to rein in the country’s public debt.

While a law passed last year stipulates that the 5 percent consumption tax would be raised to 8 percent in April 2014 and to 10 percent in October 2015 to finance growing social security costs, prime minister Shinzo Abe had yet to decide whether to enact it.

A Japan Times poll last month showed the public was evenly divided over the tax increase, with 46.8 percent in favour and 50 percent opposed. A Kyodo News agency poll of the corporate sector in August found two-thirds of major companies in favour of the increase.

The plan faces stiff opposition from critics who say raising taxes is premature because it could end the country’s economic revival, The New York Times reported.

India’s new central bank governorboosts confidence with first movesRajan to free capital controls, curbs on bank expansion

G-20 leaders agree on measures to boost world economy

AFP

Raghuram Rajan kicked off his five-year tenure as governor of the Reserve Bank of India last month by rolling back some of the capital controls that his predecessor introduced in August.

In his first public state-ment as central bank gover-nor, Rajan announced on 4 September that companies could borrow overseas for gen-eral corporate expenses, which will reduce their cost of credit.

The RBI, he added, would provide swaps for banks’ foreign-currency deposits – a move that Bank of America Merrill Lynch estimates would boost India’s reserves by US$10 billion.

Rajan said the central bank would make it easier for retail banks to open branches and lend to non-state sectors of the economy and that long-awaited new banking licences would be

issued by January, the Associated Press reported. “No longer will a well-run scheduled domestic commercial bank have to ap-proach the RBI for permission to open a branch,” he said.

On 20 September, the bank announced complex changes to its interest rate policies aimed at keeping inflation reined in while freeing credit to the country’s beleaguered industrial sector.

The bank raised the short-term repurchase rate by 75 basis points while unexpectedly rais-ing the marginal standing facility

rate that many banks rely on for their underlying financing by 25 basis points.

Higher interest rates may prompt households to shift more of their savings into banks and away from real estate and gold. “I think it’s an interesting experiment,” Rahul Bajoria, an economist at Barclays Capital in Singapore,

told The Times of India.Rajan, a University of

Chicago-trained economist, said he believed India’s economic fundamentals were sound. “My sense is that we certainly don’t need false optimism, but I think there is good reason to believe the future of the country is strong,” The Hindu reported him as saying.

Rajan addressed traditional Indian savers by promising to link inflation-indexed bonds to consumer prices.

AFP

AFP

Raghuram Rajan

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Twitter, the micro-blogging service famous for the “tweets” of no more than 140 charac-ters sent by its 200 million users worldwide, announced last month that it had filed documents in preparation for an initial public offering.

The seven-year-old com-pany said it had filed confiden-tially with the Securities and Exchange Commission in the United States, taking advantage of a law that allows companies with less than US$1 billion in annual revenue to submit IPO filings without making their prospectuses public immediately.

Analysts say San Francisco-based Twitter is one of the most highly anticipated offerings since Facebook in May last year. Goldman Sachs Group will be the lead underwriter for the ini-tial public offering, Bloomberg reported.

October 2013 7

Twitter gears for IPO withfiling to SEC

Verizon to pay US$130 billion for full ownership of wireless unit

The British telecommunications company Vodafone agreed last month to sell its 45 percent stake in United States-based Verizon Wireless to Verizon Communica-tions for US$130 billion in cash and stock.

Verizon will pay with US$58.9 billion in cash, US$60.2 billion worth of Verizon shares and US$5 billion in loan notes. The rest of the payment will come from Ve-rizon’s holdings in Vodafone Italy

and assumption of Vodafone debt. Full ownership will give Veri-

zon more flexibility and options to manage growth in the lucrative mobile data market while Voda-fone’s revenue has been declin-ing, prompting it to seek cash and focus on operations in Europe and emerging markets.

For Vodafone, the accord will allow it to return 71 percent, or US$84 billion, of the net proceeds to shareholders.

Verizon, a telecom giant that offers Internet, television and telephone services, has wanted to buy the stake for years but couldn’t agree on a price with its British partner. Analysts told ABC News in New York that Verizon hoped to buy the stake for no more than US$100 billion.

The transaction is the third biggest corporate deal recorded (behind Vodafone’s own pur-chase of Mannesmann and the

merger of AOL and Time Warner), The Economist noted. The Inter-nal Revenue Service will receive US$5 billion from the acquisition, the magazine added.

“It’s a huge deal,” Charles Gol-vin, principal analyst at Forrester Research in Los Angeles, told USA Today. “It reinforces the idea that we live in a wireless world [and it’s] recognition that Verizon needs to control the wireless as-sets entirely themselves.”

Microsoft buys Nokia’s handset, services units for US$7.2 billionFinnish company to focus on infrastructure, mapping

AFP

Microsoft is to acquire Nokia’s mobile phone unit early next year in a US$7.2 billion trans-action that will also see the Finnish telecommunications company licence its patents to the American software giant.

While Nokia shares jumped more than 40 percent on the news, the price tag is far short of the company’s 2007 market capitalization high of US$150 bil-lion. Once the symbol of mobile phone dominance, Nokia has struggled in recent years against rivals such as Samsung of South Korea and United States-based Apple.

Meanwhile, Microsoft has been slow to develop the critical mobile market. “Mobile is an area of tremendous potential but it has been one of weakness for Microsoft,” Manoj Menon, man-aging director of consulting firm Frost & Sullivan, told the BBC.

Outgoing Microsoft chief executive Steve Ballmer told the BBC that the company was transforming itself from one “known for software and PCs, to a company that focuses on de-vices and services.” About 32,000 Nokia employees will transfer to Microsoft early in 2014.

Some analysts doubted whether the Nokia deal would achieve the transformation that Microsoft expects. “We do not see this deal offering anything in-cremental to Microsoft that it did not have as part of its partnership

with Nokia,” said Nandan Amladi, a technology equities research analyst at Deutsche Bank in New York.

Other experts expressed concern that Microsoft lacked retail and supply chain experi-ence in the Finnish company’s most important markets.

Meanwhile, Finland’s business community reacted with shock at the news that its most famous enterprise would be delivered into American hands. “The biggest impact is on an emo-tional level,” economy minister Jan Vapaavuori said. “It’s the end of an era in Finland’s economic history.”

What remains of Nokia, based in Espoo, will focus on mobile phone infrastructure and a map-ping platform called Here. These assets brought in revenues of €15 billion in 2012, according to The Guardian.

Steve Ballmer and chairman of Nokia’s board Risto Siilasmaa

AFP

AFP

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8 October 2013

The United Kingdom’s anti-fraud agency will prosecute Japanese optical and medical devices manufacturer Olympus Corporation and its British unit, Gyrus, for allegedly falsifying accounts, the Japanese company announced last month.

The Serious Fraud Office has revived a two-year-old issue that many in Japan thought the company had put behind it. Olympus’s share price was devastated when the irregularities surfaced in 2011, but the company has since returned to profitability after Sony Corporation took a ¥50 billion stake this year to become its biggest shareholder.

Three board members – ex-chairman Tsuyoshi Kikukawa and former executives Hisashi Mori and Hideo Yamada – were given suspended prison terms after pleading guilty last year to charges of falsifying accounts to cover up losses of more than ¥168 billion. Olympus was also ordered to pay ¥700 million in fines.

However, as part of the investigation related to the takeover of Gyrus, based in Reading, England, the SFO conducted its own probe into the matter.

Olympus bought Gyrus, a British medical equipment firm, for US$2 billion in 2008. In addition to paying the world’s largest merger and acquisition advisory fee – US$687 million, or 34 percent of the purchase price – Olympus later wrote down the value of the deal along with other acquisitions.

It later come to light that the deal was part of a scheme to cover up investment losses dating back as much as a decade or more, when Olympus’ British chief executive, Michael Woodford, went public after being fired from the company for pressing the board for details on the investments.

An Olympus spokeswoman told Reuters that the company was also still under investigation by the Department of Justice in the United States.

Kodak refocuses afterChapter 11 bankruptcyOptical imaging company Kodak emerged from bankruptcy last month after 20 months under Chapter 11 administration in the United States. All old Eastman Kodak Co. stock ceased to exist and a new nine-person board will replace the company’s directors. Kodak will be relisted as a small commercial digital-imaging business.

LinkedIn share offerto raise US$1 billionLinkedIn, the professional social network, filed documents with the Securities and Exchange Commission in the United States last month that show it plans to raise about US$1 billion in a share offering. Forbes speculated that the com-pany is looking to bolster its financial position and take advantage of its shares gaining more than 110 percent this year.

Three new stocks joinDJ industrial averageInvestment bank Goldman Sachs, credit card issuer Visa and footwear and apparel giant Nike joined the benchmark Dow Jones indus-trial average index last month, replacing Bank of America, aluminium producer Alcoa and tech-nology company Hewlett-Packard. The changes to the S&P Dow Jones Indices were made by its index committee.

U.S. may require auditors’ names to be made public The Public Company Accounting Oversight Board in the United States is expected to propose a rule that could require auditors to identify themselves by name in corporate annual reports, The Wall Street Journal reported last month. The PCAOB said it will issue a proposal on auditor identifica-tion by December.

Deloitte parts companywith Jamaican affiliateDeloitte Jamaica ended its relationship with De-loitte Touche Tohmatsu after more than 50 years and began operating under the name Calvert, Gordon & Associates on 1 September. Two part-ners joined EY Jamaica and the firm’s clients will be shared between CGA and EY.

“Gimmick” feared as European banksseek revaluations under obscure rules

Banks in Spain and Italy are trying to persuade their governments to reassess their financial health by changing obscure accounting-related rules.

Spanish bankers are lobbying the government to transform potentially worth-less tax assets into government-guaranteed tax credits, The Wall Street Journal reported last month.

This would have the effect of raising capital-adequacy ratios, a key bench-mark of a bank’s broad health, by one full percentage point, according to Spanish finance ministry officials quoted by the Journal.

Meanwhile, in Italy, banking executives are pushing for a revaluation of the Banca d’Italia that would translate into an accounting windfall for private banks that hold stakes in Italy’s central bank.

Critics of the lobbying campaigns have protested that the reassessments are a gimmick designed to artificially strengthen the banks’ capital requirements and avoid issuing new shares or selling assets, the Journal reported.

Olympus to be prosecuted over accounting scandal

NEWSINTERNATIONAL

Charges filed after two-year investigation

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10 October 2013

NEWSGREATER CHINA

Manufacturing activity accelerated more than ex-pected last month, according to a preliminary purchasing managers survey by HSBC and research firm Markit. It signifies that a rebound in the world’s second-largest econo-my is gaining momentum.

The purchasing managers’ index rose from August’s 50.1 to 51.2, the highest since March when it stood at 51.6, HSBC an-nounced. The reading exceeds the 50.9 median estimate from economists surveyed by Bloomberg. (A reading above 50 indicates expansion.)

In August, China’s manufac-turing activity picked up after contracting to an 11-month low in July. The latest preliminary survey adds to “further evidence to China’s growth rebound,” Qu Hongbin, chief China economist

at HSBC in Hong Kong, said in a statement.

The HSBC report showed increases in output, new orders, export orders and prices, while employment fell at a slower rate. According to the index, it was the first time in six months that export orders were above 50 points.

Given the improved Septem-ber reading, analysts say they are confident that the government will meet its growth target for this year of 7.5 percent.

Earlier last month, Citigroup Inc. raised its third-quarter growth forecast for China to 7.8 percent from 7.4 percent, while Deutsche Bank in-creased its estimate to 7.9 percent from 7.7 percent.

Zhang Zhiwei, chief China economist at

Nomura Holdings in Hong Kong, said he doesn’t expect the recovery to be sustainable beyond November as it’s expected that monetary policy may tighten after a Communist Party meeting that month.

“We expect the government to shift its focus away from the speed of growth towards efforts to rebalance the economy and improve the quality of growth,” Zhang told Reuters, adding that he predicts 6.9 percent economic growth in 2014.

China’s second-largest securi-ties brokerage by market value, Haitong Securities, announced last month that it would buy a Shanghai-based leasing com-pany, UT Capital Group Co., for US$715 million.

Haitong will buy 100 percent of UT Capital and pay cash, the seller, American private equity group TPG, said in a statement announcing the deal.

UT Capital’s main operating unit is UniTrust Finance & Leasing

Corporation, which provides leas-ing finance services to more than 3,000 clients in China.

UniTrust’s customers include companies in health care, educa-tion, printing, textiles, machine tools, electronics and injection moulding.

The acquisition of UT Capital gives Haitong, founded in 1988, the ability to lend to China’s small- and medium-sized en-terprises, which often struggle to obtain financing from major

banks, Bloomberg noted.“Leasing is a very effective

financial service to support our country’s SMEs as well as high-technology and private business growth,” Wang Kaiguo, chairman of Haitong, said in the brokerage’s statement.

“It also perfectly matches with our government’s national development strategies and economic restructuring plans,” Wang added.

The value of UniTrust’s assets

have risen from 4.4 billion yuan to 10.5 billion yuan between 2010 and 2012, and net assets reached 2.3 billion yuan at the end of June, TPG said in a statement.

TPG, which has more than US$55 billion of assets under management, acquired 100 per-cent of UT Capital in 2008.

The private equity firm has been trying to sell the business since April, when it hired Morgan Stanley and UBS as advisers, Reuters reported.

Prada’s first-half net profit fell short of expectations as demand for luxury goods cooled in China, media reports revealed last month.

Sales growth in Greater China for the luxury Italian fashion house slowed to 20 percent in the first half from 35 percent in the same period last year.

Prada’s net profit rose by 7.6 percent in the first half to €308.2 million, less than analysts’ esti-mates of €321 million, according to a Reuters poll.

Even with the slowdown, the Hong Kong-listed company remains optimistic about China, which makes up 21 percent of the brand’s revenue. “China is per-forming in a very good way and growth is still very high,” chief financial officer Donatello Galli said, adding that investment plans in China were unchanged.

Prada hit by slowdown in sales

Manufacturing activity increasesto a six-month high in SeptemberHSBC index indicates a comeback for new export orders

TPG agrees to sell its China leasing business to Haitong Securities

Manufacturing in China

AFP

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October 2013 11

China’s central bank injected a large amount of funds into the banking system on 23 September in an effort to meet rising demand before the end of the third quar-ter and the National Day holiday period.

The People’s Bank of China added 88 billion yuan in funds through reverse repurchase agreements, also known as repos, a process in which central banks purchase securities from banks with the agreement to sell them at a higher price at a future date.

The repo was priced to yield 3.9 percent, according to a state-ment on the PBoC website.

It is the first time that the PBoC has injected cash into the interbank market since 30 July, when it added 17 billion yuan to the system.

It is also the largest single-day liquidity injection since 410 bil-lion yuan of 14-day agreements were sold on 7 February before the Lunar New Year holiday.

The cash injection comes as borrowing costs in the interbank market have been increasing as the banks started raising cash to meet capital requirements due at the end of each quarter, The Wall Street Journal reported.

Analysts speculate that the move aims to ease concerns about a quarter-end cash crunch.

China’s financial markets will be closed from 1-7 October, when cash demand is expected to surge because of travel expenses and holiday shopping.

Foreign direct invest-ment into China stood at US$8.38 billion in August, up 0.62 percent from a year earlier, the Ministry of Commerce announced last month.

According to the ministry, China attracted US$79.8 billion of FDI in the first eight months of this year, up 6.37 percent from the same period last year. The data excludes the banking, secu-rities and insurance sectors.

The inflow in August, how-ever, is substantially lower than the 24.13 percent growth in July and the 20.12 percent jump in June.

Shen Danyang, a ministry spokesman, insisted on 17 September that the drop was

“nothing to worry about.” He attributed the lower number to a higher base figure a year ago.

“We now focus more on the quality, structure and effective-ness rather than on growth pace,” Shen told media, adding that fluctuations in FDI flows in a single month are “insufficient to reflect the big picture.”

Since February, FDI flows into China have maintained

steady growth and will remain relatively stable in the next few months, Shen added, saying the total FDI inflow for the year would be higher than last year.

Analysts believe that the positive data add to signs of an upturn in China’s economy, which expanded 7.7 percent in 2012, its slow-

est pace in 13 years.“China’s economic growth

has showed more signs of recov-ery and the FDI inflow is, on the whole, in line with the trend,” Lian Ping, chief economist at the Bank of Communications, told China Daily.

Lian added that the govern-ment’s measures to stabilize growth have strengthened global investors’ confidence.

PBoC injects cash beforelong holiday

Shareholders of U.S. pork giant OK Shuanghui dealShareholders of Smithfield Foods, the world’s largest pork producer and processor, last month approved a plan to sell the company to China’s largest pork producer, Shuanghui Interna-tional, for US$4.7 billion in cash.

More than 96 percent of the votes cast at a shareholder meet-ing called by Smithfield, based in the United States, were in favour of the acquisition. The votes cast represented 76 percent of Smithfield’s outstanding common shares.

“This is a great transaction for

all Smithfield stakeholders, as well as for American farmers and U.S. agriculture,” Larry Pope, president and chief executive officer of Smithfield, said in a statement.

The deal, already approved by the U.S. Committee on Foreign Investment, will be the largest takeover of an American com-pany by a Chinese firm.

Under the terms of the deal, Smithfield shareholders will re-ceive US$34 in cash for each share of Smithfield common stock.

After the acquisition closes,

Shuanghui must decide on its association with Spanish pack-aged meats company Campofrio, in which Smithfield holds a 37 percent stake.

Shuanghui can decide to buy the remaining stake in Cam-pofrio, which it does not own, or will have to reduce its stake to less than 30 percent, Reuters reported.

In 2012, Smithfield’s annual turnover was US$13 billion, while Shuanghui generated US$6.2 billion revenue in the same period.

Foreign investment’s steady risereflects focus on quality: ministryInflows expected to exceed last year’s despite fluctuations

AFPShoe factory in China

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12 October 2013

NEWSGREATER CHINA

National auditors “saved1 trillion yuan in 30 years”The National Audit Office said it and its affiliat-ed agencies had recovered losses or trimmed superfluous expenditures totalling 1.2 trillion yuan over the three decades of its existence. Liu Jiayi, China’s auditor general, told Xinhua that the agency had become a major force in the fight against corruption.

Researcher estimates localdebt totals 20 trillion yuanA government researcher estimates that China’s local government debt has doubled in just two years to about 20 trillion yuan. Liu Yuhui of the Chinese Academy of Social Sciences told The Wall Street Journal last month that municipali-ties’ dependence on heavy borrowings to drive rapid economic growth is unsustainable.

New Zealand liquidators chase Mainland creditorsThe liquidators of collapsed New Zealand construction company Mainzeal are chasing its Chinese shareholders for nearly NZ$50 million in restitution. Brian Mayo-Smith and Andrew Bethell of BDO in Auckland told the Marlborough Express that the 13 companies under administration were “heavily intermin-gled” with the Shanghai-based Richina group.

Non-performing loansratio set to rise – PwCThe total value of non-performing loans at the top 10 Chinese banks stood at 411.66 bil-lion yuan, up 9.43 percent from the same pe-riod last year, according to figures compiled by PricewaterhouseCoopers China. Raymond Yung, PwC financial services leader for the Mainland, said the NPL ratios increased by 0.02 percentage point to 0.95 percent.

Boeing hopes jet saleswill triple over 20 yearsAircraft manufacturer Boeing expects China’s fleet of planes to triple over the next 20 years and projected demand for 5,580 new jets in China between 2014 and 2033. The Chicago-based company said more than half of the country’s jetliners are made by Boeing.

More than 850,000 candidates across China sat the national accounting basic-level certificate examination last month without the use of pens and paper, the Ministry of Finance announced.

The paperless exam has expanded to all test centres in 15 provinces, autono-mous regions and municipalities, Xinhua reported the ministry as announc-ing. The remaining 16 provinces and provincial-level regions will have pilot computer-based exams in selective centres.

Another 500,000 candidates will take the same exam with paper and pencil in October, according to the ministry.

During 2012, the year the annual exam was first conducted paperless, 4.52 million of 29.51 million candidates passed the complete test.

Ministry oversees national rollout of computerized accounting exam

Alibaba plumps for listing after talks with exchangeInternet giant sought governance exemption

Alibaba Group Holding will pursue an initial public offering in the United States, most likely on the New York Stock Exchange, after talks with Hong Kong Ex-changes and Clearing broke down, international media reported last month.

The negotiations foundered after regulators decided they would not allow Alibaba’s partners to retain control over board nominations, Bloomberg reported on 26 September.

Allowing Alibaba’s partnership to veto board nominations would enable co-founder Jack Ma, who owns 7.4 percent of the stock, and his management team to run the company without interference from activist investors, Bloomberg noted.

Investor activists praised the Hong Kong exchange for not agreeing to Ali-baba’s terms. “The benefit of turning away people who ask for favours is that it will maintain standards and attract better quality companies,” David Webb, a for-mer stock exchange director who founded the Hong Kong governance watchdog Webb-site.com, told Bloomberg.

Alibaba, which analysts told The New York Times could be worth up to US$75 billion, is the most anticipated Internet IPO since Facebook’s US$16 billion offer last year.

The company has an 80 percent market share in China’s burgeoning e-com-merce sector, Reuters noted. Last year, consumers bought a combined 1 trillion yuan of goods through Tmall and Taobao – Alibaba’s main market platforms – 58 percent more than in 2011.

The decision ends weeks of negotiations between Alibaba, the Hong Kong stock exchange and the city’s securities regulator over Alibaba’s shareholding structure.“We’ve come to the end of dialogue with Hong Kong and we’re pivoting to the U.S. to start the listing process,” a company source familiar with the discus-sions told Reuters.

HKEx declined to comment on the media reports.