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  "docId": "019dd923-622c-750b-8b96-a79a828f1e2b",
  "docSlug": "be28a8f1faf0",
  "documentTitle": "IQE plc (IQE)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-02-08 00:00:00",
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  "notes": "The slide uses a forensic accounting approach to challenge the legitimacy of reported financial gains.",
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      "kind": "callout",
      "text": "Our diligence leads us to believe that CSC is likely non-substantive and effectively an alter ego of IQE, supporting our view that IQE's economic reality is more appropriately understood by adjusting for the transactions with CSC.",
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      "text": "CSC's accounting for the transactions is inconsistent with that of IQE... IQE has its cake and eats it too... IQE's recognition of gains is arbitrary... CSC has lost money but IQE ignores losses... CSC is likely an alter ego of IQE.",
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      "text": "In H2 2015, IQE realized a £4.7 million gain... IQE noted in its response to ShadowFall that it engaged an 'independent' valuation firm... IQE transferred intangible assets to CSC, which were valued at £20.0 million.",
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      "text": "The five accounting issues that cast doubt on the substance of the gains from transacting with CSC are:",
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      "kind": "paragraph",
      "text": "We estimate IQE's PP&E contribution to CSC was valued at 4.6x its carrying value, straining credulity",
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