Mohawk Industries, Inc. — Moody’s

Announcement: Moody’s – Mohawk Industries Inc.: Allegations of accounting improprieties are credit negative

Global Credit Research – 13 Jul 2020

New York, July 13, 2020 — Moody’s Investors Service, (Moody’s) commented that allegations against Mohawk Industries, Inc (Mohawk) of channel stuffing and intentionally overproduced product are credit negative and suggest aggressive business practices and potential corporate governance weaknesses. However, because the company has good liquidity bolstered by recent debt offerings and the allegations will take time to litigate, there is no impact on the company’s Baa1 senior unsecured rating and stable outlook.

For further information please see Moody’s Issuer Comment on Mohawk Industries, Inc. at www.moodys.com

Headquartered in Calhoun, Georgia, Mohawk is a leading producer of floor covering products for residential and commercial applications. Brands include Mohawk, Unilin, Karastan, Lees, Bigelow, Dal-Tile, American Olean, Pergo, Marazzi and Quick-Step. Revenues for the publicly-traded company are approximately $10.0 billion.

This publication does

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British Accounting Firms Face New Setback as FRC Opens Probe

(Bloomberg) — Britain’s audit industry faces another dent to its reputation as the nation’s accounting watchdog ordered a probe into PricewaterhouseCoopers LLP, Ernst & Young and Oliver Clive & Co.’s work for defunct London Capital & Finance Plc.

The Financial Reporting Council said in a statement on Wednesday that its enforcement unit will look at the audits of now defunct mini-bond lender London Capital & Finance for the periods ending April 30, 2015, the year ending April 30, 2016 and for the year ending April 30, 2017.

London Capital & Finance issued mini-bonds, taking funds from about 14,000 customers that the company said it used to make loans to corporations for investment. It went into administration after the U.K. Financial Conduct Authority and Serious Fraud Office opened investigations.

The announcement comes at a difficult time for the accounting firms. The so-called Big Four, including PwC and Ernst & Young, have

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Wirecard’s former CEO Markus Braun arrested over finance scandal

Markus Braun, former CEO of Wirecard, stands accused of market manipulation. (Peter Kneffel/picture alliance via Getty Images)
Markus Braun, former CEO of Wirecard, stands accused of market manipulation. (Peter Kneffel/picture alliance via Getty Images)

Markus Braun, who resigned as chief executive of Wirecard (WDI.DE) last week, has been detained in Bavaria in connection with the balance-sheet scandal at the troubled German payments company.

The prosecutor’s office in Munich said Braun turned himself in on Monday evening and would appear before a judge today, who will decide on whether or not to keep him in custody.

Braun, an Austrian, is being accused of inflating Wirecard’s total assets and sales volume “through feigned income from business” in order to make the company more attractive to investors and customers.

Wirecard was plunged into crisis last week after auditors EY refused to sign off on the company’s 2019 accounts, saying they could not verify the existence of €1.9bn (£1.7bn, $2.1bn) Wirecard claimed to hold in trust accounts overseas.

Braun

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Germany to overhaul accounting regulation after Wirecard scandal

Markus Braun, former chief executive of Wirecard - Michael Daider /Reuters
Markus Braun, former chief executive of Wirecard – Michael Daider /Reuters

Germany’s accounting watchdog is set to be stripped of its powers in the wake of the Wirecard scandal. 

The government will end its contract with the Financial Reporting Enforcement Panel (FREP) as soon as Monday, according to reports.

The job of overseeing company accounts will be taken on by Bafin, Germany’s financial regulator. 

“We have reached an agreement with the Finance Ministry to terminate the contract,” a Justice Ministry official told the Bild am Sonntag newspaper

Germany has been rocked by the collapse of payments company Wirecard, which filed for insolvency last week after admitting that €1.9bn (£1.7bn)  of cash on its balance sheet probably didn’t exist

Markus Braun, chief executive of the Dax-listed company, resigned on June 19 and was then arrested on suspicion of accounting fraud and market manipulation. 

German authorities are facing questions over

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