{"id":321,"date":"2021-02-02T09:45:27","date_gmt":"2021-02-02T09:45:27","guid":{"rendered":"http:\/\/s2invest.com\/?p=321"},"modified":"2024-07-03T06:56:46","modified_gmt":"2024-07-03T06:56:46","slug":"gao-expert-valuation-report-refines-accounts-and-capital-flow-of-company","status":"publish","type":"post","link":"https:\/\/s2invest.com\/index.php\/2021\/02\/02\/gao-expert-valuation-report-refines-accounts-and-capital-flow-of-company\/","title":{"rendered":"GAO Expert Valuation Report Refines Accounts and Capital Flow of Company"},"content":{"rendered":"\n

In a dispute between two Singaporean parties in a manufacturing venture in China, GAO Advisors prepared expert valuations and produced a comprehensive capital flow methodology to refine the venture\u2019s accounts and to assess the efficacy of claims made.
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Background<\/strong>                                                      <\/strong><\/p>\n\n\n\n

The two parties were ex-classmates from secondary\nschool, and in 2005 the Plaintiff hired the Defendant as the managing director\nin his company which he expanded to China in 1999. The Defendant took over\noperations of the China-incorporated company, which existed as eight separate\ncorporate entities (\u201cthe Companies\u201d) to disperse revenue and qualify as a\nsmall-scale taxpayer in China\u2019s Value Added Tax (VAT) system. <\/p>\n\n\n\n

The Defendant oversaw operations until his\nresignation in 2013. In that time, his primary responsibility was the\nmanagement of the Companies\u2019 monies. Thus, he was in charge of the company\nseals, which were necessary for the withdrawal of monies from their bank\naccounts. Upon his resignation, the Defendant gave the Plaintiff notice that business\noperations have ceased two months earlier, and informed of a self-procured\ndivision methodology of the remaining assets. He also withdrew a certain\npercentage of the assets as severance.<\/p>\n\n\n\n

The Plaintiff disagreed with the amount withdrawn\nand appointed GAO to produce an investigative report for the Companies\u2019 accounts\nand assess the Defendant\u2019s methodology.<\/p>\n\n\n\n

The Challenge<\/strong><\/p>\n\n\n\n

The Companies\u2019 mode of operation posed a significant\nhurdle in the valuation process. The sole provider of capital for business operations\nwas the Plaintiff\u2019s parent company. Hence, the capital flow, as per standard\nprotocol, followed the Companies\u2019 bank accounts to the Defendant\u2019s to the Plaintiff\u2019s.\n<\/p>\n\n\n\n

The existence of multiple bank accounts at each\nlevel of capital flow, the inconsistency in in-voice submission for bookkeeping\npurposes (many handwritten), and preference for cash dealings for ease of trade\nmeant tracking and assessing capital flow was a challenge.<\/p>\n\n\n\n

Gifted Group’s Method<\/strong><\/p>\n\n\n\n

In tracking the Companies\u2019 capital movement, Gifted Group set out the following scope of work:<\/p>\n\n\n\n