GE was shocked to evaporate 62.6 billion yuan overnight

Do you remember the accounting scandal of Enron?

A huge family that looks "too big to fail" fell to the ground and declared bankruptcy after being exposed the veil of financial fraud. General Electric, a centuries-old shop, is now facing similar charges. Harry Markopolos, an accounting expert who exposed Madoff's Ponzi scheme, issued a report accusing GE of "accounting fraud for decades" that led to inaccurate financial data submitted to regulators.

Marco Polos also said that the scale of the GE scandal was bigger than Enron's.

Ponzi scam whistle-blowers re-exposed GE financial fraud

An accounting expert named Harry Markopolos recently released a 175-page report. In the report, he pointed out that GE was suspected of concealing problems in fraudulent financial statements. Harry Macoporos is the exponent of Madoff's famous "Ponzi scheme" in financial history. His exposition eventually led to the imprisonment of Bernard Madoff, the manipulator of the case, for 150 years. Affected by this, GE shares fell sharply at the beginning of Thursday, falling more than 15% at one time, and eventually fell 11.3%, the biggest one-day decline in 11 years. Market value evaporated 8.9 billion US dollars a day, equivalent to 62.6 billion RMB. What is the truth of the matter, and will GE be the next Enron and the last straw to overwhelm U.S. stocks? How large is the scale of fraud? In the latest 175-page report, Marco Polos said that after seven months of investigation, he found about $38 billion (267.5 billion yuan) of financial fraud at GE, which is equivalent to 40% of the company's total market value. At the same time, he found that GE's practice of concealing financial problems dates back to 1995. And he believes that what he found was just the tip of the iceberg of GE's financial problems.

In fact, he believes that GE has more financial problems than two famous financial fraud scandals in the United States, that is, the sum of former energy giants Enron and former telecommunications giant World Communications. Harry Macoporos, American financial expert:

This will lead to GE filing for bankruptcy. WorldCom and Enron have lasted for almost four months. Let's see what happens to GE. General Electric also immediately responded to the report tit-for-tat, claiming that Marco Polos's accusation was false and that the investigation report was full of loopholes. It also said that the move was just market manipulation. Lawrence Karp, CEO of General Electric, also purchased about $2 million worth of company stock (about 14.08 million yuan) after the stock price plunged to prove his innocence. Will it be the next straw that Enron overwhelms US stocks?

Mine-exploding events occur in the market, often at critical times. That's the Enron scandal in 2001. U.S. stocks had reached their peak and were turning around, but there were fewer bigger bearish catalysts, so Enron came into being. Enron was an energy company based in Houston, Texas, USA. Before its bankruptcy in 2001, Enron had about 21,000 employees and was one of the world's largest power, gas and telecommunications companies, with a reported turnover of $101 billion in 2000. Fortune magazine ranked Enron as the most innovative company in the United States for six consecutive years. But what really made Enron famous all over the world was the financial fraud scandal that caused the company with hundreds of billions of assets to go bankrupt in 2002 within a few weeks. General Electric is a century-old store. Its business has covered many fields such as medical, aviation, energy and so on. Since its establishment, it has exerted tremendous influence in many industries. It has also been the world's highest market value enterprise. However, it has been frustrated in several key markets in recent years. After last year's restructuring, the company retained only three major businesses: jet engines, generators and wind turbines. At present, the company has business in more than 100 countries in the world, with 315,000 employees.

October 2016, GE ranked 10th among the 100 most valuable brands in the world in 2016. On December 18, 2018, General Electric Company ranked 14th in the "Top 500 World Brands 2018" compiled by the World Brand Laboratory.

However, the recent development of GE has not been smooth. According to GE. US's second quarter results in 2019, there was a recurrence of financial losses, as a result of the restructuring of its ailing power business, more cash was withdrawn from its profitable industrial sector than expected.

The company had considered over-splitting its business before, but once the financial scandal proved to be true, I am afraid that the giant company will not even have the opportunity to split up, and may go to the end of the crisis.