GE Shares Fall On Report That Its Finances Are Worse Than Disclosed
August 15th, 2019Bigger fraud than Enron or WorldCom.
Via: Reuters:
General Electric (GE.N) shares fell as much as 15% on Thursday after fraud investigator Harry Markopolos, who blew the whistle on Bernard Madoff’s Ponzi scheme, said GE was concealing deep financial problems.
In a 175-page report, Markopolos accused GE of hiding $38.1 billion in potential losses and asserted that the company’s cash situation was far worse than it had disclosed.
“GE’s true debt to equity ratio is 17:1, not 3:1, which will undermine its credit status,” Markopolos said.
The report says GE is insolvent and asserts that its industrial businesses have a working capital deficit of $20 billion.
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The report alleges that GE faces $38 billion in future expenses that it has not disclosed. “GE’s $38 billion in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds,” the report says.
