Caterpillar Inc. (NYSE:CAT) announced Thursday that it would pay $29.5 million to the sellers of Chinese equipment maker to resolve all outstanding issues.

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This deal reached by the world’s largest maker of construction equipment is considerably less than the $164.5 million that it was contracted to pay to Emory Williams and James Thompson Jr., who controlled Siwei via a Hong Kong-listed entity, and two other parties.

Caterpillar Inc. (NYSE:CAT) said it had reached a settlement to resolve disputes arising from its $700 million purchase of ERA Mining Machinery Ltd (HKG:8043), cutting its outstanding obligations on the deal by $135 million. The giant construction equipment maker took a $580 million impairment charges in January on the 2011 deal, alleging that its target’s value had been inflated by accounting irregularities from unnamed parties.

Peoria-based Caterpillar Inc. (NYSE:CAT) however indicated that neither Mr. Williams nor Mr. Thompson were involved in the alleged misconduct.

Caterpillar Inc. (NYSE:CAT) also disclosed that the parties involved in ERA have released all their claims relating to the acquisition of the Chinese firm.

ERA Mining Machinery Ltd (HKG:8043), including its wholly-owned subsidiary Zhengzhou Siwei Mechanical & Electrical Manufacturing Co. Ltd., is commonly known as Siwei.

Siwei is China’s fourth-largest maker of hydraulic roof supports.

Caterpillar Inc. (NYSE:CAT) alleged that the mining equipment firm in Zhengzhou, Siwei had falsely inflated its revenues over many years prior to the 2012 acquisition. Caterpillar disclosed that inventory checks last November revealed a gaping hole in the accounts. This forced Caterpillar to undertake a top-to-bottom reevaluation.

Last year Caterpillar agreed to pay up to $886 million for Siwei’s parent company, Hong Kong listed ERA Mining.

According to a Reuters report, Caterpillar Inc. (NYSE:CAT) in its investigation since January has found that some senior managers at Siwei, one of whom was an ERA director, had engaged in the accounting misconduct and they have now been removed. However Caterpillar did not name the ERA director. The investigation was triggered late last year after discrepancies were found in the mining equipment firm’s inventory figures.

This case has raised concerns on corporate governance standards adopted at Chinese companies. Several concerns have been raised on the accounting standards from Chinese firms, many of whom have overseas listing or become target for foreign companies keen on Chinese acquisition.

However Caterpillar Inc. (NYSE:CAT) group president Steve Wunning reiterated confidence in China. He emphasized that Caterpillar remains committed to supporting the large base of customers in the Chinese mining industry and they are well-positioned for China’s long-term growth.