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Monday, January 28, 2013

Former chairman of firm linked to Caterpillar fraud calls diligence "extensive", (NYSE: CAT)

The former chairman of a Chinese unit of Caterpillar Inc at the centre of alleged accounting misconduct said on Monday that due diligence on the U.S. company's takeover of the firm had been "extensive" and he was surprised by Caterpillar's plan for a writedown. Caterpillar said on Jan. 18 that it would write off most of the $654 million it paid for ERA Mining Machinery Ltd after uncovering "deliberate, multi-year, coordinated accounting misconduct" at its subsidiary Zhengzhou Siwei."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 in a statement when it announced the writedown that it believed its due diligence process was "rigorous and robust".

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.