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Focus Media Giving Away Cash?


I am becoming obsessed yesteryear the disclosures well-nigh the businesses Focus Media disposed of inward 2009. The total disclosure is inward this post - together with an explanation every bit to why Focus Media's accounting must hold upwards incorrect is inward this post.

But to summarize - Focus Media disposed of 7 businesses inward 2009.

All businesses were disposed of at a loss.

Six of these businesses were given away for no consideration at all. In 1 consideration of a depression unmarried digit publish of millions of dollars was paid.

Influenza A virus subtype H5N1 bulk of these businesses were given dorsum to their master owners.

Influenza A virus subtype H5N1 bulk of these businesses are inward British Virgin Islands subsidiaries.

And the accounting for these transactions is messed up.

That said, the cash menses contestation from the latest 20F provides to a greater extent than information.

Here is a region from the cash menses statement:

Year

2009  
2010  
2011  
  






Investing activities:
Purchase of equipment
$(10,654,598$(18,692,608$(38,918,317
Cash of disposed subsidiary
(27,315,949(40,805,068    
Proceeds from sale of a subsidiary
—    116,872,231  7,296,097  
Purchase of subsidiaries together with earn-out payment paid to start subsidiaries, internet of cash acquired
(92,411,545(40,186,684(13,228,135
Investment inward an equity method investee
—    —    (61,003,263
Deposit refunded to start subsidiaries
329,516  —    —    
Proceeds from disposal of fixed assets
196,115  471,128  671,950  
Increase inward restricted cash
—    —    (199,346,126
Cash paid for short-term investments
(29,257,303(137,551,150(1,124,033,872
Sale of short-term investments
865,589  29,290,296  1,044,680,415  
  






Net cash used inward investing activities
$(158,248,175$(90,601,855$(383,881,251
  











I desire yous to discovery the highlighted line...

In those susbsidiaries disposed of inward 2009 at that topographic point was embedded 27,315,949 dollars inward cash.

These subsidiaries were given away.

If yous translate the accounts literally this society has been giving away cash.

I accept a handful of explanations for this demeanour only plausibility is becoming strained. Perhaps Focus Media's investor relations region tin aid (I accept sent them this post inward advance only accept received no reply).

Anyone else amongst an explanation could yous delight set it inward the comments.





John

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