Peoria Public Radio News
2:03 pm
Fri May 17, 2013

Cat to pay less for acquistion of Chinese mining equipment company

Caterpillar will pay 135-million dollars less in the acquisition of a Chinese mining equipment company as part of a settlement agreement. Cat last June acquired ERA, including its wholly-owned subsidiary Zhengzhou Siwei Mechanical and Electrical Manufacturing. 

In January, Caterpillar announced an internal investigation uncovered deliberate accounting misconduct at Siwei. The investigation found that certain Siwei senior managers participated in the misconduct. Cat removed those responsible. As part of the settlement agreement with two former directors of ERA, Cat has 29-point-five million dollars of the acquisition costs still to pay. 

Caterpillar was initially planning to pay somewhere in the neighborhood of 700 million dollars for the acquisition. The settlement comes after Caterpillar took a 580 million dollar write-off related to the accounting misconduct.