facebook
twitter
search
search

Caterpillar devalues Chinese purchase

Jan. 21, 2013 at 1:02 PM

SHANGHAI, Jan. 21 (UPI) -- Caterpillar Inc. said a Chinese mining equipment company it bought in 2012 had been grossly misrepresented by its accounting figures.

In June, Caterpillar paid about $700 million to buy ERA Mining Machinery Ltd., which makes hydraulic shaft lifts used in coal mines to reduce the chances of a collapse, The Wall Street Journal reported Monday.

Caterpillar said it would write off about $580 million of the cost of buying the company. It said "accounting misconduct" at ERA included overstating its profits before Caterpillar bought it.

Caterpillar said the accounting problems were "perpetrated without the knowledge of any Caterpillar employees who did not come over to Caterpillar as part of the acquisition," of ERA.

A source close to the situation said the accounting fraud was part of the reason a vice president in charge of mining products, Luis de Leon, had left the company.

De Leon left "to pursue other opportunities," the company said in a statement.

Related UPI Stories
Latest Headlines
Trending Stories
Rapper DMX found unconscious, revived by New York police
Alaska woman claims McDonald's Happy Meal hasn't aged in six years
N.H. primary polls open: Kasich, Sanders get early leads
5 Reasons why Denver Broncos won't be repeat champions
Exposure to flashing light may prevent jet lag