Tag Archives: Brazil

Audit and Review, Deloitte

U N N E R V I N G ● N E W S

“If Deloitte was caught with one such brazenly egregious case, just what else is there that goes unreported, and undiscovered when it comes to corporate “books”, not only in Brazil but also in the US.”

### zerohedge.com Dec 5, 2016 9:43 PM
Auditor Deloitte Fined A Record $8 Million For Massive Fraud
By Tyler Durden
Remember when auditors were, by their very definition, supposed to be the embodiment of credibility, trustworthiness and moral fibre? The Brazilian arm of Big Four auditing giant, Deloitte, forgot these simple prerequisites and as a result the US auditing watchdog fined the firm a record $8 million for what amounts to massive fraud: falsifying audit reports, altering documents and providing false testimony during an investigation that unearthed what it described as its “most serious” finding of misconduct.
The US Public Company Accounting Oversight Board, or PCAOB, also penalised or barred 12 former partners, including a national practice director, and auditors of the Brazil-based Deloitte Touche Tohmatsu Auditores Independentes.
The Deloitte Brazil case is the first time the PCAOB has “charged a member of the Big Four auditing firms with fraud and for failing to co-operate with an investigation” according to the FT [Financial Times]. Worse, unlike banks which resolve similar cases without admitting or denying guilt, in settling, Deloitte Brazil admitted it had violated quality control standards and failed to co-operate with the auditing board’s inspection and subsequent investigation.
“This is the most serious misconduct we’ve uncovered. It’s cover-up after cover-up after cover-up,” Claudius Modesti, director of enforcement at the PCAOB, said. “As an investor you’re expecting that the audit was done properly and sufficiently and that wasn’t the case here.”
Not only was that not the case, but the details read like straight out of a fictional account of third-world crime.
Read more

deloitte-svg

Deloitte Touche Tohmatsu Ltd, commonly referred to as Deloitte, is a UK-incorporated multinational professional services firm with operational headquarters in New York City in the United States.
Deloitte is one of the “Big Four” accounting firms and the largest professional services network in the world by revenue and number of professionals. Deloitte provides audit, tax, consulting, enterprise risk and financial advisory services with more than 244,400 professionals globally. In FY 2016, the company earned a record $36.8 billion USD in revenues. As of 2016, Deloitte is the 6th-largest privately owned organisation in the United States.

The Big Four:
● PricewaterhouseCoopers (PwC), largest accounting firm in terms of revenue.
● Deloitte Touche Tohmatsu (Deloitte)
● Ernst & Young (E&Y)
● Klynveld Peat Marwick Goerdeler (KPMG)

OTAGO RUGBY & RACING ASIDE

Remember the old chestnut…. The connection between TTCF (The Trusts Community Foundation Ltd; formerly, The Trusts Charitable Foundation Inc) —and Deloitte.

“TTCF engaged Deloitte when they desperately needed an ‘independent’ audit so as to put the Department of Internal Affairs (DIA) and Audit NZ off the scent. Unfortunately, even though Deloitte uncovered approximately $40k per month in mis-spent funds, TTCF ensured that was left out of the report because after all they were paying the Deloitte bill.”

Related Post and Comments:
2.6.15 Queen’s Birthday honours to rogues #TTCF #ORFU #PokieRorts
11.3.15 DIA —poor job as gambling regulator
2.2.15 Operation Chestnut: DIA, SFO fluffing round the edges #TTCF #ORFU
11.1.15 Southern complainants: IPCA won’t ensure upfront investigation…
14.12.14 DIA regulates what? Not white collar crime, not with govt looking on!
5.8.14 Gambling Commission shuts down racing’s Bluegrass pokie trust
3.2.14 DIA signed up Intralot amid concerns about bribery and corruption
31.12.13 Martin Legge: Operation Chestnut [DIA’s PR exercise]
30.12.13 DIA insights: Pokie rorts, money-go-rounds, names
11.10.13 New Zealand: Pokie trusts same everywhere #pokierorts
10.10.13 Whistleblowers’ message heard ??! #OtagoRacingClub #pokierorts
1.8.13 Politicians keeping DIA/SFO quiet on ORFU and TTCF #pokierorts
31.3.13 DIA and Office of the Auditor General stuff up bigtime #pokierorts
21.2.13 DIA, SFO investigation #pokierorts
11.11.12 Department of Internal Affairs #pokierorts #coverup #TTCF
25.7.12 Martin Legge backgrounds TTCF (pokie trust) and Portage and Waitakere Licensing Trusts #DIA

█ For more, enter the terms *pokies*, *pokie rorts*, *ttcf*, *orfu* or *dia* in the search box at right.

Posted by Elizabeth Kerr

This post is offered in the public interest.

*Image: Deloitte via Wikimedia Commons

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Robert Hamlin: Dreadnoughts and Crosses #Anzacs #Gallipoli

Dreadnoughts and Crosses – How battleships brought the ANZACS to Gallipoli

By Robert Hamlin

Part 1 – The South American Arena

Picture 1 HMS DreadnoughtHMS Dreadnought: The revolutionary fighting machine, launched in 1906, whose namesakes eventually brought the ANZACS to Gallipoli.

4.00 am on Sunday, 20 December 2015 marked the centenary of the last man leaving ANZAC cove at the end of the Gallipoli campaign. By the time the Allies evacuated the peninsula after just over eight months of fighting, each side had lost just under 60,000 dead. By the military standards of other battles in World War I these losses were small. Despite this, for three combatant countries, the young dominions of Australia and New Zealand and the yet to be born Turkish Republic, the battle was a seminal national event.

For this reason the details of the battle itself are well known and have been repeatedly re-enacted in print, video and film. What has received slightly less attention is how the Allies and the Turkish (Ottoman) Empire came to be enemies in the first place. The Ottoman Empire was not part of the deadly twin daisy chains of alliances and obligations that dragged all the other great imperial powers of Europe into an involuntary state of war in the days after the Austro Hungarian Empire chose to attack Serbia. The Ottomans had the luxury of choice. They could join the Allies, or they could join the Central Powers. Or, they could not join in at all – the eminently sensible option favoured by the then Sultan, Mehmed V.

The convoluted and sometimes ridiculous story of how the Ottoman Empire eventually did get involved on the side of the Central Powers, and thus became one of New Zealand’s ‘enemies’, makes for interesting reading. It involves pride, greed, incompetence, insubordination, brilliant opportunism and desperate decisions made in haste with little information. Above all it involves battleships, the great floating fortresses that so disastrously possessed the minds of men both great and small in the first decades of the twentieth century. Battleship mania was a truly global phenomenon. Thus this story begins not in Europe or Asia, but in South America some eight years before the First World War broke out.

At the beginning of the twentieth century the four-cornered battleship building race between Germany, Britain, the USA and Japan was well established. With their greater shipyard capacity, this was a race that the USA and Britain should have won comfortably. However, they were hampered by their political systems. The governments of Germany and Japan, where democracy was tightly delimited, were able to pursue their naval build up steadily and in a carefully planned manner. In the USA and Britain public opinion and short-term political expediency made this impossible. Periods of complacency when shipyards were starved of orders for battleships alternated with periods of panic, when they were literally drowning in them.

This created an intolerable situation in British and American shipyards. Dreadnought battleships were at the limits of the technology of their day. Their construction required massive fixed installations served by enormous and highly skilled workforces that simply could not be assembled and dispersed at will. If a race-winning dreadnought building capacity was to be maintained, somehow the demand for them within these two democracies had to be smoothed out. Then, as now, it was realised that exporting these cutting-edge weapons of war to third countries was one way in which this could be done. As a result, both Britain and the USA became vicious rivals in the international export market for dreadnought battleships. The most skilled and unscrupulous salesman of their day fanned out from the British and American yards, backed by enormous budgets and the full diplomatic capacities of their respective governments.

The happiest hunting ground for these dreadnought salesmen was South America. Nowhere in the world had changed politically as much as this continent had in the nineteenth century. In 1800 the continent was sleepily divided between the declining empires of Spain and Portugal. By 1900 all this had been swept away and replaced by a series of young, prickly and increasingly wealthy republics. The largest of these: Brazil, Chile and Argentina had a particularly volatile relationship with one another, in which diplomatic tension, military posturing and sporadic minor actions created an ideal environment for battleship selling.

In Part 2, the activities of the international dreadnought salesmen across three continents create a ludicrous but potentially explosive situation.

Part 2 – The battleship barterers

Picture 2 Rio de Janeiro - Sultan Osman I - AgincourtRio de Janeiro – Sultan Osman I – Agincourt: One ship, three owners, three names

Once they had identified South America as the prime market for British and American battleships, the Edwardian dreadnought builders got straight to work. By various adroit manoeuvrings, the British and American sales representatives succeeded in selling no less than seven dreadnoughts to these three countries in less than three years. The process started with Brazil agreeing to buy three dreadnoughts from Britain in 1906; with two to be constructed immediately, and a third to be laid down once the first two had been completed. Argentina and Chile promptly responded by each ordering two larger ships: Chile’s from Britain, and Argentina’s from the United States.

However, the fever rapidly abated, and by 1908 the South American ardour for battleship building was cooling in the face of the staggering costs and risks of escalation. In the case of Brazil, an additional chill was provided by a major naval mutiny and the collapse of the rubber and coffee export commodity markets that had been expected to pay for the ships. As a result Brazil attempted to extricate itself from its commitment to build the third ship that it had ordered. The British fought hard to avoid this, and eventually their efforts were successful. However, the witches’ brew of conflicting commercial and political agendas that eventually preserved the deal also produced what was the most ridiculous design ever executed in the dreadnought era.

The Rio de Janeiro was built for show. The Brazilian government were determined that if they were going to have to pay for this unwanted battleship, then it should be the most impressive yet seen in South America. The choice lay between bigger guns or more turrets. Turrets won the day, and the Rio de Janeiro shipped seven, in a period when every other nation was standardising on four. This meant a big ship, but Brazil’s maintenance facilities were limited, which meant that the big ship had to be narrow and tremendously long. Finally the capacity for the officers to entertain in style and live in comfort had a far higher priority than other navies. The Rio de Janeiro had far larger internal spaces and far fewer watertight bulkheads than her equivalents. All of these requirements, plus a respectable top speed, meant that something had to give, and that something was armour. Rio de Janeiro had armour that was barely more than half the thickness of her contemporaries.

Perhaps as the Rio de Janeiro took shape on the slipway it became increasingly obvious that she looked more ridiculous than imposing. Whatever the reason, the Brazilian government decided to get rid of her. In late 1913 she was put up for sale while still incomplete, and sold to the Ottoman Empire for just under six million dollars – a respectable sum for that time. The Rio de Janeiro became the Sultan Osman I. The Brazilians, no doubt highly relieved, departed from the scene. The deal may have been facilitated by the fact that the ever-active British dreadnought salesmen had already sold another larger and far more capable dreadnought, the Reşadiye, to the Ottomans two years previously.

Although Sultan Osman I was the weaker unit of the two new Turkish ships, the situation within the Ottoman Empire at the time of its acquisition endowed it with a much greater political importance to the Turks. The Ottoman Empire, the ‘sick man of Europe’ had been in retreat for half a century. Provinces in the Balkans and North Africa that had been Turkish for centuries had fallen away. The retreat had been accompanied by a sequence of mass murder and ethnic cleansings that had left millions of Turks dead and millions more displaced and destitute within the areas that are now modern Turkey.

The Turks were aware that this process was not complete, and that the Ottoman Empire’s neighbours harboured further expansionist ambitions that would potentially leave the Turkish nation partitioned and bereft of any territory or secure identity. This was a national rather than simply a government realisation. As the government was both chaotic and destitute, the Turkish nation raised the money to buy the Sultan Osman I, largely by public subscription and a myriad of small collections in coffee shops and the like. Special ‘navy donation medals’ of various grades were struck and given to larger donors. It was an act that both presaged and represented the popular will that would lead the Turks to victory at Gallipoli in 1915 and to a secure independence in 1923. The significance of the gesture was reinforced by the name that was given to her – that of the Ottoman Empire’s founder.

In Part 3, British misjudgements over the sale of the two battleships turn a possible ally into a potential foe.

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Stadium: Fairfax business editor pokes DCC’s Fubar

### stuff.co.nz Last updated 05:00 05/03/2014
Business
Empty seats, empty pockets
By Chalkie
[…] Chalkie is concerned by a $48 million scheme to build a stadium in Petone for the benefit of the Phoenix A-League football team and its fans. From what we know of the proposal, the Hutt City Council – which means ratepayers – will be asked to contribute $25m towards building a “boutique” 10,000 to 12,000 seat arena at the southern end of the Petone Recreation Ground. […] The good burghers of the Hutt will be best placed to judge the practicalities of the scheme when further details are available, but the financial side has worrying similarities to the set-up of Forsyth Barr Stadium in Dunedin. Arm’s length charitable trust controlling the budget? Check. Private sector funding promised? Check. Troubled sports franchise as anchor tenant? Check.

[…] In Dunedin, those involved in developing the city’s shiny new covered stadium are far from universally popular after ratepayers ended up with huge debts and an ongoing headache from running the thing. The original idea, itself controversial, was for ratepayers to contribute $129m – split between $91.4m from the city council and $37.5m from the regional council – towards the $188m cost of the stadium, with private sector funding contributing $45.5m. The balance was coming from local trusts and a government grant. In the end, the stadium cost $224m and the ratepayers were hit up for $200m of that. The private sector funding was virtually zero.

You could write a book on the series of failures that left a relatively small number of people – Dunedin has a population of about 126,000 – exposed to such high costs. But even in the short version written by PricewaterhouseCoopers it seems councillors were not well informed about the project and financial controls were inadequate. The controversy still simmers. Local campaigner Bev Butler, a determined and resourceful opponent of the stadium scheme, continues to unearth aspects of the process that do not reflect well on its management. One of the latest involves the relationship between Carisbrook Stadium Charitable Trust, which runs the project, and the council.

The problem in this instance is the lack of transparency around public spending, even when there was obviously concern at the outset to keep a firm grip on it. More than that, Dunedin got in over its head and allowed itself to be the schmuck landed with everyone’s bill at the end.

Money from the council was supposed to be transferred to the trust only to pay for third-party invoices billed to the trust. An exception to this rule provided for the trust’s administration costs to be covered by a general monthly payment from the council. These “trust costs” invoices were for between $40,000 and $90,000 a month, running from July 2007 to January 2010. According to Butler’s information, which tallies with the council schedule, the payments totalled $2.2m over the period. An Official Information Act response from the council to Butler said the money was paid “to cover staff and administration costs” of the trust “to facilitate ease of administration”.

Chalkie can see that it would be easier to pay for the trust’s incidentals in this way. However, it opened a big hole in accountability for spending because the staff and administration costs detailed in the trust’s annual reports for the period total $1,068,796, more than $1m less than the sums invoiced. It is not clear from the accounts how the other $1.1m was spent because no combination of other costs – marketing, PR, fundraising or project administration – seems to come close to the right figure. Chairman of trustees Malcolm Farry told Chalkie he could provide documents to clarify the details last week, but unfortunately they were not yet available as we went to press.

There are several lessons for the Hutt City Council, including to beware of using a charitable trust as the development vehicle, to ensure private sector money is paid up front with a buffer for contingencies, and to ensure there is no ambiguity about costs.
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● Chalkie is written by Fairfax business bureau’s Tim Hunter.

Related Posts and Comments:
24.2.14 Carisbrook Stadium Trust: ‘Facts about the new Stadium’ (31.5.08)
22.2.14 Carisbrook Stadium Trust costs

Posted by Elizabeth Kerr

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Sao Paulo: Arena Corinthians (Itaquerão) crane collapse

Arena Corinthians - Itaquerao [@FutebolnoPonto] 2Arena Corinthians – Itaquerão Costing $360 million, the Sao Paulo stadium will seat nearly 70,000 people. The crane collapse may have been caused by unstable soil after a rain storm. [Image: @FutebolnoPonto]

### 3News Thursday 28 Nov 2013 5:41a.m.
Two dead in World Cup stadium collapse
By Tales Azzoni and Stan Lehman
Part of the stadium that will host the 2014 World Cup opener collapsed Wednesday, killing two workers and aggravating already urgent concerns Brazil won’t be ready for soccer’s signature tournament.
The accident at the Arena Corinthians, known locally as the Itaquerao, could hardly have come at a worse time – just a week ahead of the draw that will determine the tournament’s schedule and with the top names in soccer all descending on Brazil.
The stadium was nearly finished before the collapse, which occurred when a construction crane crashed into a 500-ton metal structure. That structure then cut through the outer walls of the venue, destroying part of the outside of the building and rows of seats and slamming into a giant LED panel that runs across the stadium’s facade. AP
Read more + Video

Arena Corinthians - Itaquerao [businessinsider.com.au] aerialArena Corinthians - Itaquerao [businessinsider.com.au] detail 1[Images: businessinsider.com.au]

[updated] ### 3News Thursday 28 Nov 2013 8:47p.m.
Deadly crash puts light on Brazils WCup troubles
With one thunderous crash, Brazil’s troubled preparations for the World Cup are thrown in the spotlight for all the wrong reasons, just as soccer gears up for the high-profile setting of the schedule for next year’s big event.
The newspaper Estado de S. Paulo said public prosecutors had previously pointed to 50 irregularities at the venue, including some related to emergency drills. AP
Read more

****

### 3News Thursday 28 Nov 2013 10:34a.m.
Past problems at Brazil World Cup, Olympic Stadiums
A look at problems suffered by some of the stadiums being built or renovated for the 2014 Football World Cup and the 2016 Olympics.
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Posted by Elizabeth Kerr

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NHNZ development mode (new business, markets)

“It’s like the next version of NHNZ. It’s like NHNZ version 3.1 in a lot of ways, version one being when we were part of TVNZ, version two being when [former managing director] Michael Stedman took over and gave us a new lease of life, and this is another step.” –Kyle Murdoch, NHNZ

### ODT Online Wed, 27 Nov 2013
Children’s TV for NHNZ
By Vaughan Elder
Dunedin’s NHNZ is preparing to take on the likes of Disney with the launch of its own international children’s television channel. NHNZ managing director Kyle Murdoch said, in preparation for the launch of the channel next February, 54 staff were hard at work in Dunedin producing content for it. About 40 were new staff who had joined the office since the middle of this year.
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● Michael Stedman, former managing director, retired at the beginning of this year.

NHNZ website (detail)Natural History New Zealand website [screenshot detail]

Wikipedia: NHNZ

Posted by Elizabeth Kerr

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