Least Favored in 2013: Featuring the year's shockers from Wall Street to Washington. Read Fed Policy shenanigans; Tech spies; SeaWorld tragedy; Caterpillar-China scandal; Bud Beer scandal; Bill Ackman's Herbalife; LIBOR rigging; Forex Scandal; and check out this video CEO Walk of Shame.
NEW YORK (TheStreet) -- Even though Caterpillar (CAT) is based in Illinois, its most important market is arguably China.
The world's largest equipment maker, Caterpillar has more than 15,000 employees and more than 30 facilities in China.
It also has been operating there since 1978, but this history didn't prevent it from falling victim to massive fraud earlier this year.
In January, Caterpillar disclosed that it had discovered "deliberate, multi-year, coordinated accounting misconduct" at Siwei, a mining equipment company it acquired in 2012.
The discovery led to a $580 million writedown and a big hit to Caterpillar's quarterly earnings. Shares fell 1.5% following the announcement.
A Caterpillar board member said the deal received scant attention due to a much larger transaction taking place at the same time.
The board member said, "It came as a complete surprise to us. It was presented to us as a pretty straightforward transaction. It's a shame. It should have been investigated further."
The debacle certainly contributed to Caterpillar CEO Doug Oberhelman being a leading candidate for "Worst CEO of 2013."
Caterpillar has hardly been the only victim of fraud in China, though.