CCTV Transcripts

CCTV Script 16/08/19

— This is the script of CNBC's news report for China's CCTV on August 16, 2019, Friday.

Ge's alleged financial fraud attracted so much attention because it was revealed by Harry Markopolos, the whistleblower of the biggest ponzi scheme in financial history. His Revelations eventually led to 150 years in prison for Bernard Madoff, the mastermind of the case.

In his newly released 175-page report, Markopolos says his seven-month investigation found $38 billion in accounting fraud at GE, or 40 percent of the company's market value. At the same time, he found that GE's concealment of its financial problems dates back to 1995. And he believes that what he discovered is only the tip of the iceberg of GE's financial fraud, in fact, he thinks GE was involved in more financial fraud than two of America's best-known accounting scandals, that are the former American energy giant Enron and former telecom giant MCI Inc.

GE, of course, immediately hit back, saying Markopolos's allegations were false and that the report was flawed, it said the move was just market manipulation.

GE CEO Lawrence Culp also bought about $2 million worth of company stock to prove his innocence after the stock price plummeted, Of course, that's only a tenth of his annual income.

There is some support for Culp's claim that the report is market manipulation. Indeed, Markopolos acknowledged in an interview with CNBC that his investigation was backed by a hedge fund that profited handsomely from the company's bet against GE, but declined to name the hedge fund, saying only that it was a mid-sized U.S. hedge fund.

Harry Markopolos

American former securities industry executive and a forensic accounting and financial fraud investigator

"I can't - I promised confidentiality," "It's a mid-sized, U.S. based hedge fund."

But he also said he believes his findings are true. In the same interview, Markopoulos also warned that the financial fraud scandal would eventually drive into bankruptcy, and it was time to see how much longer it could survive.

Harry Markopolos

American former securities industry executive and a forensic accounting and financial fraud investigator

"It's going to make this company probably file for bankruptcy," "Worldcom and Enron lasted about 4 months ... We'll see how GE does."

GE's shares fell after the report, falling as much as 15% overnight before closing down 11%, the biggest one-day drop in 11 years, GE already has problems before this report released.

GE was kicked out of the Dow Jones industrial average last year, Last October, many leaders of the company changed, its current CEO just take office for less one year, and its CFO resigned at the end of July this year.

GE had considered demerger before, if the financial scandal turns out to be true, GE would not have a chance to do demerger but go bankruptcy directly.