The former chairman of a Chinese mining equipment firm bought by Caterpillar Inc said on Monday he was dismayed by allegations of accounting misconduct at a subsidiary that prompted the U.S. firm to take a $580 million writedown. Emory Williams Jr said Caterpillar had conducted extensive due diligence before its takeover of Hong Kong-listed ERA Mining Machinery Ltd last June, adding that he was seeking further details from the company, the world's largest maker of tractors and excavators."We were shocked and dismayed to learn, from press reports, about the very significant goodwill impairment that Caterpillar is taking in relation to the acquisition of ERA's subsidiary Siwei," Emory Williams Jr said in a statement.Caterpillar said on Jan. 18 that it would write off most of the $654 million it paid for ERA after uncovering "deliberate, multi-year, coordinated accounting misconduct" at its subsidiary Zhengzhou Siwei."We cooperated very closely with the Caterpillar team during their extensive due diligence," Williams said, adding that he and John Lee -- the English name used by fellow ERA director Li Rubo -- had taken the company's fiduciary and reporting responsibilities very seriously prior to its acquisition.
Caterpillar Inc. (Caterpillar) is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Shares of CAT fell by 1.06% or $-1.02/share to $95.58. In the past year, the shares have traded as low as $78.25 and as high as $116.95. On average, 6057470 shares of CAT exchange hands on a given day and today's volume is recorded at 8907230.
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