Governance and Fraud
First Assignment - Individual
PERCENTAGE OF FINAL GRADE: 20% (20 marks)
WORD LIMITS: 2,000 words (excluding reference list)
Description / Requirements:
(1) You have been allocated with two companies, WOODSIDE PETROLEUM LIMITED and TPG Telecom Ltd listed on the ASX.
With reference to the two companies you have been allocated:
i. Critically evaluate the depth of each company’s adoption of ASX CGC principles and recommendations (2014) in the fiscal year ending 2017.
ii. Provide a summary of the boards’ composition over the last 3 years (year ending 2015 to 2017) and give your opinion as to whether there is a link between boards’ diversity and companies’ overall performance.
(5 + 5 = 10 marks)
(2) TFS Corporation (ASX Code TFS), renamed Quintus (ASX Code QIN) on March 22 2017, is Australia’s largest grower, plantation manager and producer of Indian Sandalwood. On the 27 February 2017 TFS announced half year results to the market and in a media release titles “Exponential Growth in Indian Sandalwood Sales Driving Transformational Year”. The media release presented half year revenue of $152.6 million, half year net profit after tax of $28.3 million and a strong cash balance at 31/12/2016 of $89.8 million. The media release made many positive predictions about the future growth potential and the share market valued the company at over $600 million. On March 22 2017 the rebranding of Quintus was celebrated in Melbourne during the time of the Grand Prix at a gala event hosted by Adam Gilchrist and Daniel Ricardo. The celebration had however been soured by the release that week of a report by the US based short selling firm Graucus (https://glaucusresearch.com). The report questioned the value of TFS (Quintus) and pointed to a failure in corporate governance. The share price collapsed and in May 2017 the company was suspended from trading on the ASX. In January 2018 Quintus entered bankruptcy.
(i) Based on your own research, discuss the strengths and weakness in corporate governance at TFS (Quintus) over the past 5 years.
(ii) Discuss how corporate governance at TFS (Quintus) contributed to the apparent demise of the company.
(4 + 6=10 marks)
(Total 10 + 10 = 20 marks)
Submission Instructions
• Provide a table of contents (excluded in word count) and ensure all questions are clearly labelled.
• Harvard style of referencing to be employed.
• Written in font size 12 for body writing; headings and block quotes may have different sizes
• Include page numbers
• Line spacing of 1.5 or double spacing