Standard & Poor’s Ratings Services announced from its Hong Kong office that its ratings on Pacific Century Insurance Co. Ltd. – currently “BBB-” with a stable outlook – “are not affected by a recent restatement of the results of the wider Pacific Century group for the first nine months of 2005, as there is no impact on the company’s capitalization, cash position or reserves.”
S&P explained: “The group’s restated profit for the period amounted to HK$8 million instead of the HK$105 million originally reported in November 2005 [U.S.$1.03 million from U.S. $$13.5 million]. The overstatement was due to staff error following the introduction of a new accounting treatment for investments.”
S&P said it “believes that the underlying profitability of the company remains adequate, though weaker than previously thought. However, the apparent lack of control over accounting and reporting at the company and group level could become a concern if it is not corrected and further errors occur, an outcome that would affect Standard & Poor’s assessment of the company’s credit profile.”
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