Donald Tsang Hong Kong CE

New World China Land 0917

Make 200+% profit by being a son-in-law of Cheng Yu-tung, the controlling shareholder of a publicly listed company.

"

A mainland appraiser put the value at 6.6 billion yuan (HK$7.49 billion). Doo is selling it for 5.8 billion yuan.

Doo, who initially held 30 per cent of the project, bought the remaining 70 per cent through two separate deals from New World in December last year and June for a total of 1.3 billion yuan. New World valued the project at about 1.9 billion yuan, although an independent appraiser put the value at 4.5 billion yuan in December and raised it to 5.2 billion yuan six months later. New World did not explain why it had chosen not to price the project according to the independent appraisal.

"

Verdict: avoid even if New World was the only listed stock on the market available for investment - spend your money on beer instead.

Asian Citrus..

People throwing money like rocks, portfolios of glass.

Asian Citrus opened at HK$51.25 ($6.61) in Hong Kong, compared with the closing price of 45.75 British pence (76 cents) yesterday for the London-traded shares. The stock in Hong Kong later fell to HK$19.94 when it was suspended at 11:57 a.m. local time, according to exchange data.

Not Worth HK$50

Asian Citrus is  not a HK$50 stock, South Ocean s McConnell said.

The company s net tangible asset value per share was 37.3 yuan ($5.46) on June 30, according to its listing prospectus. By displaying this figure without noting the stock split, Hong Kong Exchange s computers may have led investors to  think that their investment is backed by 10 times more assets than it really is, Webb said.

Sinotronics 1195, heavy action

219m shares out of the 559m issued transacted.

The reason became apparent with the filing made by Union Day Group Ltd/Sze Ming Yee at close, they have increased their position to just under 400m shares to 71.49%.

The plot thickens.

SINOTRONICS01195.HK ( Electronics and Electrical Product... ) Delayed Quote1 2009-11-25 16:01

News

Last 0.415 MonitorPortfolio Chg 0.140 Bid 0.420 High 0.590 Open 0.450 Volume 219.40M Chg(%) 50.909% Ask 0.425 Low 0.400 Prev Close 0.275 Turnover 107.80M

"But most of the funds have now gone missing and Azedo has disappeared"

Ex Grant Thornton managing partner loots client's funds..

"The company said it launched the investigation into Gabriel Azedo last month after it was alleged he had stolen the money from Angela Gardner.

Gardner, a local businesswoman, filed a lawsuit against the company on Friday alleging Azedo had been taking her money since 1999.

 Grant Thornton has been investigating certain matters concerning Gabriel Azedo s personal conduct and has discovered that he appears to have used the Grant Thornton name in an unauthorised and inappropriate manner, it said in a statement."

Sinotronics 1195 shenanigans webs Webb

Another one of the notorious Fujian based companies (amongst others like First Natural, Chaoda,...) with opaque corporate governance.

Sinotronics is an electronics manufacturing company with has a NAV of over HKD$1/share, cash of ~$1.17/share, total debt of 0.81/share. At the time of writing Sinotronics had a market cap of $154m.

In summary:

The trouble started in Feb/April 2007 when they entered into two interest swap agreements with Douche bank with notational values of $390m and USD$100m. This was a disastrous deal, which while they received upfront payments of HKD$39m and USD$10m from Douche bank, they had to settle semi-annually with some index contrived by the bank ("Douche bank Pan-Asian Forward Rate Bias Index"). The "bias" in the name didn't set off alarm bells.

The controlling shareholder, Lin Wang Qiang, to his credit (or regret) subsequently offered to indemnify Sinotronics against derivative losses on Dec 2007.

The famous crusader of corporate governance in HK, David Webb purchases 880k shares avg 0.88/share giving him a total of 34m shares (6.09%)

Sinotronics decided the terms of the interest swap agreements were onerous and stopped paying interest on Oct 2008 and Douche bank sued and Sinotronics counter sued saying a Douching bank employee allegedly misled them.

Webb sells 600k shares @0.38 (-56% loss) and is below the 5% reporting threshold and has 27.7m shares left. Together with his other vehicle Preferable Situation has 3.4m shares or 6.04%.

Sinotronics and Douche settled on Nov 2009 with Sinotronics agreement to pay "less than US$23.7m" the original demand, the exact amount is not revealed.

To access the funds to pay this (keep in mind they have HKD$648m in cash):

- Lin Wang Qiang under terms of his indemnity agreement was now on the hook for HK$29.2m and to pay this he decided to sell all his shares (230m shares).

- Sinotronics decides to do a open offer of 1 share for 2 at a price of 0.18cents/share.

Friday 20 Nov 2009, Union Day Group files a notice saying they have 169m or 30% of the company.

Tuesday 24 Nov 2009. Stock is suspended from trading and reopened on Wednesday with the announcement that Mr Lin had sold all his shares to Upbest the unbelievable price of 0.18 each and with regulatory requirements will make a general offer for all outstanding shares at the derisory price of 0.18 each.

Stock opens at 0.45 (from the previous closing of 0.275), peaks at 0.59 and at this time trading at 0.44 giving it a market cap of $245m.

Now this is a company that for the last 5 years averaged over $100m/year in FCF. Why are they continuously raising funds when they have so much cash? Is the cash still there?

Walter Schloss at Jim Grant's conference

One of the best investors in many lifetimes. 65 years of investing.

Walter: I had a friend who was a therapist at a mental hospital and he asked me if I would talk to his patients about investments. And I said OK, and he introduced me and so I started to talk about investments. And after a few minutes a big fellow in the front of the audience got up and he said, "Shut up, you idiot and sit down!" I looked at my friend and I said, "What do I do?" He said, "Sit down. That's the most intelligent thing that fellow's said in months."

China Strategic 0235

Hires ex government minister (Secretary for Financial Services) Frederick Ma for $3.5m. Also hires Raymond Or Ching Fai for $9.24m salary. Granted options worth $462m. Total: $475m.

Has 131 staff and trades in 'battery products'. Had revenues of $18m in 2008 and has an average loss of $100m for the last 5 years. Had a capitalization of $100m.

Gets cash by issuing shares and notes June to "capture suitable investment opportunities when when they are identified"

In 10th November they announce acquisition of Nan Shan resulting in a 80% pop in share price.

Incredibly intuitive of the individuals back in June to invest in a money losing battery products company which is looking for acquisitions. Highly unlikely that they had prior knowledge about China Strategy diversifying into a totally completely different business line by buying a life insurance company.

Mud like transparency.

Endwave (ENWV) hubris

.. or greed?

Entrenched management with hands in cookie jar - salaried helpers who just can't release that tit. The Endwave (ENWV) management really needs to end it all and liquidate. Trading at $2.40, no debt and $7/share in cash.

Fu Ji Food (1175) bonds

The faint gurgling shriek we hear... the sound of the fat lady sliding around the s-bend.

"Fu Ji's convertible bonds, of which HK$2.2 billion are outstanding, were being offered for sale yesterday at just six cents on the dollar, while potential buyers were offering four cents, two holders of the securities and an independent broker confirmed.

The bonds traded at 25 cents in the dollar the day after Fu Ji fell into provisional liquidation. But bondholders have turned gloomy after learning that business at the beleaguered caterer has deteriorated drastically since it last met financial reporting obligations nearly a year ago."

An insidious trap sprung by insiders on investors. A glance at their published numbers would have sprung some interest, little do investors know the enterprise was hollowed from within by fraud and a paper facade held up with string and wire. A market cap of $4B (USD$500m) disappears into the pockets of thieves.

There are a lot more out there. Beware.

01175 FU JI Catering - Company Summary

Index Constituent : NA Price (2009/07/28) HKD 7.600 (Suspended) 52W High/Low (HKD) 7.620 / 2.270 Issued Cap (mn shs) 541 Auth Cap (mn shs) 2,000 Market Cap (HKDmn) 4,114 Par Value HKD 0.01 Last Dividend Nil (2009I) Ex Dividend NA Dividend Payable NA Change Price Sector Market Avg Dly Vol 1 Month +0.0% -1.3% -5.1% NA 3 Months +0.0% -9.2% -4.8% NA 1 Year +102.1% +25.6% +57.4% 1,701K Key Financial Ratio (Fiscal Year : 03/2008) Current 2.18X Oper Margin 24.8% LT Debt/Equity 71.3% Net Margin 21.5% Total Debt/Equity 81.2% Return on Equity 15.3% Price/Book 1.38X Return on Assets 7.2%

Year End (MM/YYYY) Earnings (HKDmn) YOY Chg (%) EPS (HKD) YOY Chg (%) DPS (HKD) PER (X) Yield (%) Dividend Payout(%) Book NAV (HKD) 03/2004 77.94 +127.3 0.260 +127.2 NA 29.26 NA NA NA 03/2005 156.05 +100.2 0.470 +80.8 0.038 16.18 0.50 8.09 1.546 03/2006 243.12 +55.8 0.546 +16.3 0.153 13.92 2.01 28.02 2.783 03/2007 351.81 +44.7 0.697 +27.6 0.206 10.91 2.71 29.56 3.550 03/2008 456.16 +29.7 0.857 +22.9 0.241 8.87 3.17 28.14 5.526

Naked options and advisors

Meanwhile down under, advisors trading naked options on behalf of clients. I guess the 'helper' was so successful trading his own account and being a kind soul he wanted to spread the loot by helping his clients.

Unfortunately the market doesn't respect visualizations..

From the SMH:

But in the winter of 2004 it all turned sour. Within a year many Ord Minett clients had lost all their money - millions of dollars wiped out in increasingly risky options trading.

ASIC has investigated the claims against Ord Minnett and said in July last year that it would ''not take any further action & at this time''.

Ben Leeden continues to work as a private client adviser in Ord Minnett's Gold Coast office. His former clients say they are still "very hopeful" of recouping some of their losses from Ord Minnett.

"I visualise it every day," Tyson says. "I do a lot of visualisation."

Why you don't talk, from the inside.

An experienced police officer tells you why you should never agree to be interviewed by the police.

Don't talk to the cops

US specific, but good advice. Mr. James Duane, a professor at Regent Law School and a former defense attorney, tells you why you should never agree to be interviewed by the police.

Chinese IPOs, China Zhongwang Holdings

IPOs are generally a scam perpetuated by the founders and their investment bank backers. The Chinese IPOs are hot steaming dumplings served with fillings of faeces to the public:

"Mainland aluminium producer China Zhongwang Holdings has instructed accounting firm Ernst & Young to independently review its initial public offering prospectus following allegations that the firm falsified information about its customer base in the share-offer document.

Zhongwang raised HK$9.8 billion in its May flotation, becoming the first company to obtain over US$1 billion from investors on any global stock market for nine months. The fund-raising propelled Liu Zhongtian , the Liaoning-based firm's founder and chairman, to 10th place on the Hurun rich list, which estimated his personal wealth at 28 billion yuan (HK$31.8 billion).

But on September 14, the mainland newspaper China Economic Observer claimed to have found that some customers named in Zhongwang's IPO prospectus did not buy from the company last year.
"

But hold on!! We have the fox counting the chickens... the documentation will be in a suitably altered state. Nothing to see here. Move on.

"The aluminium firm yesterday told the Hong Kong stock exchange it had appointed a "big four" accountant "to conduct [an] independent review on the group's sales transactions with the major 10 customers during the period from 1 January 2008 to 30 June 2009 and documentations of income taxes for the financial year ended 31 December 2008".

People close to the company with knowledge of the matter confirmed the auditor was Ernst & Young. They said Zhongwang had not decided whether to make the findings public."

More Fu Ji fraud

The likely scenario being management set up parallel operations and diverting business to them. Disclosure was non-existent. With the number of staff exiting (78%) it must have degenerated into a open joke on the bond and stock holders.

The lesson to be learned here is to shoot first and ask questions later when it comes to mainland China companies. Red flag here was the accounts were not released because CFO was too 'ill'.

A Director (Carlye Tsui) left because she said she couldn't get enough information, but this was at a much much later stage.

What is the heroic SFC doing? .. Sh*t F*ckall Competence

The Fu Ji auditors: CCIF CPA

"

In that statement, Fu Ji said its business was stable and it was confident of increasing its share of the mainland catering market, which it said was growing fast. It called its financial position "solid" and stated profit attributable to shareholders of 250.23 million yuan (HK$284.57 million) for the six-month period.

In the past 12 months, according to a report prepared for Fu Ji's bondholders by accounting firm KPMG and reviewed by this newspaper, the beleaguered caterer has lost its contract to serve food to Intel, its largest corporate client, as well as contracts with Wal-Mart and Taiwanese computer manufacturer Asus. Fu Ji has just 3,000 staff, down from 13,823 in September last year, the report adds.

Fu Ji has also been losing senior staff. The caterer's heads of sales, legal services, human resources, investment and convenience foods resigned in the past year, the report says. Of 15 sales managers who worked for the company a year ago, 14 were gone, KPMG said, while 12 of 19 finance staff also left. The report says mainland courts hearing unspecified cases against Fu Ji have frozen some of the caterer's assets, meaning it cannot sell them.

The report left bondholders fuming. "There is a huge issue here with disclosure. We had no idea any of these problems were happening," one complained.

The SFC declined to comment.

"

Voluntary liquidations. Norstar

Appears that Fu Ji and First Natural aren't the first, but is a start of a trent of net nets going for liquidation and wiping out shareholders. The management seem to escape not just unscathed but with most of the booty.

"

Norstar chairman Lilly Huang convinced the High Court to put the firm into provisional liquidation. Norstar had made a wrong-way bet on accumulators and owed 39 million yuan on that contract. It had also been sued by a supplier for 326 million yuan.

However, according to Webb, the company should have had 753 million yuan of spare cash after these liabilities.

Lai has the same court-appointed role at Norstar. Deloitte is now selling the car-parts firm to state-owned Beijing West, which is connected to Norstar's management.

"

HK Free market quotes

HKEx has introduced a new information service whereby real-time basic securities market prices are made generally available on designated websites free of charge to the public (the  Free Prices Website Service ). It is additional to the many market data services currently provided by HKEx-licensed information vendors and aims to meet the basic needs of investors for simple pricing information satisfied at present most probably by free delayed market data.

Fu Ji Food (1175) liquidates voluntarily

Has more assets ($3b) than liabilities ($2.2b) but the only ones emerging ahead in this mess will be the managers.

As typical of mainland companies.

Poor management with ulterior motives:

• An official at Fu Ji's headquarters in Shanghai said: "We think the game of financing is too complicated for us. We just want to quit it by liquidation."
• company was short of cash and had lost many middle managers, who had left to set up operations that compete with Fu Ji's businesses.

Bond holders are Fxked as they have no way of recovering a good proportion of assets as the company would have already been stripped. Bonds are trading at a 75% discount which means stock holders will get nothing but an expensive lesson:

Insolvency: who gets what in Hong Kong

1. Employees
2. Lenders with a claim on the company's assets, such as mortgages on properties
3. Unsecured creditors, usually banks and bondholders
4. Shareholders

A real clue to the shenanigans happening was the resignation of a Director who actually said something useful:

"Carlye Tsui Wai-ling, chief executive of the Hong Kong Institute of Directors, resigned as an independent director of Fu Ji last month. In her letter of resignation, she expressed concern that she could not get information from the company in a timely manner, and cited its delay in issuing its annual results last year"

This is a similar situation to First Natural Foods (1076) voluntary liquidation.

HK/China police border fades

Extradition procedure - stick them on a Sampan and point it North.

"June 4 student leader Zhou Yongjun tried to enter Hong Kong in late September 2008, but he was taken by Hong Kong police to the mainland authorities without any legal procedures.

HK Real estate shenanigans

Available for a lucky buyer: HK$357m: 39 Conduit Road, West Mid-Levels

Developer: Henderson Land Development (0012)

"The developer says the apartment is on the 66th floor, but the building is only 40 storeys high."

"So just what floor is the semiduplex in question actually on? "I can't tell you the answer to that, but we will tell the buyer the unit is on the 66th floor. Our top unit will be on the 88th floor, and the second-highest floor will be the 68th floor," the spokesman said."

GP Nano from IPO to flames in 2 ears

Criminal charges.. where?

Ban on directorships for two former GP Nano executives

The former chairman of defunct GP Nano Technology Group, Fung Chiu, and former executive director Lian En-sheng were banned by the High Court yesterday from being directors of any company for seven and six years respectively. The pair were accused by the Securities and Futures Commission of giving misleading information about transactions involving GP Nano. The company listed in July 2001, but its shares were suspended from trading two years later. It was eventually delisted in June 2005 and wound up three months later. Enoch Yiu

How to strip a company in HK

Let's say you have a company listed on the HKEX and you have voting control and there are numerous family controlled companies on the HKEX.

The 3 simple steps to legally raping the public shareholders:

1. Form a BVI company owned by the chairman

2. Issue warrants/convertible bonds to said BVI company at a STEEP discount, vote in favor of this.

3. PROFIT!!!!

Of course there is no requirement to disclose who really owns the BVI company.

What will the HKEX do? (Sweet FA)

More about how Tack Hsin (0611) company is doing it.

Thickest Choi

Yes, someone really did name himself that. Being "Thick" wasn't enough, he had to be the thickest.

Legacy of Tung Chee Wah's mother tongue language policy in local schools.

Willie wiley robbers in the wild

SCMP...

Willie sells Cordoba stake at a loss
Toh Han Shih
Oct 06, 2009


Willie International Holdings, a Hong Kong-listed firm with a troubled past, has sold a stake in a subsidiary at a loss to a woman indirectly related to Stanley Ho Hung-sun.

On September 30, the company sold a 39.4 per cent stake in its previously fully owned subsidiary Cordoba Homes to Karen Lo Ki-yan for HK$450 million - a 25 per cent discount to Cordoba's net asset value - which resulted in a HK$90 million loss to Willie, the firm said in an announcement to the stock exchange.

Click here to find out more!

Cordoba's assets include residential and commercial properties in Hong Kong, a 20-storey commercial building on the mainland, "a yacht, artwork, paintings and a 10-carat diamond", said the statement.

Willie, which is involved in property investment, securities, money lending and energy, had a net profit of HK$135.75 million in the first half after consecutive losses from 2004 to last year.

Lo is a member of the family that controls the Vitasoy drinks empire and a sister of Sharen Lo, the wife of Lawrence Ho Yau-lung, the son of Stanley Ho.

From February 2005 to March 2008, Lo was vice-chairman of Hong Kong-listed Heritage International Holdings (SEHK: 0412), which has been a shareholder in Willie since 2005 and now holds a 28 per cent stake in the company.

In November 2005, 99.6 per cent of Heritage independent shareholders voted against a plan to buy a property in Mount Kellett Road on The Peak from Lo for HK$73.8 million.

On February 10, 2006, Heritage was fined HK$15,000 by the Securities and Futures Commission for failing to inform the Hong Kong stock exchange about Heritage increasing its stake in Hong Kong-listed 139 Holdings (SEHK: 0139), which is now called GR Vietnam Holdings.

In June 2006, the High Court allowed Fubon Bank (Hong Kong) (SEHK: 0636) to pursue a HK$235 million debt claim against Willie.

In that judgment, Mr Justice Anthony Rogers said Hong Kong's financial reputation and economic well-being were under threat.

In November last year, the SFC fined Willie chairman Henry Chuang Yueheng HK$350,000 for his involvement in the unauthorised withdrawal of more than HK$30 million in client securities held by Chung Nam Securities.

Willie has also conducted transactions with Hong Kong-listed Mascotte Holdings, which owns a 2.8 per cent interest in Willie.

Ex-Ernst & Young partner strips Akai assets

Even the auditors are in bed with the thieves. In a similar situation in the US there would be lynch mobs and blood on the streets, here in HK there is just ghostly silence from the regulators who are acutely aware who feeds them.

E&Y settles with the liquidators for US$400m when their documents were found to be forged. A E&Y partner who was in charge of audit and now chairman of E&Y resigns, obviously spent his time on the audit drinking.

They claimed that David Sun Tak-kei, the independent review partner on the audit from 1991 to 19999, did a mere seven hours of work on Akai's audit in the three years leading up to the company's collapse.

Sun is now Ernst & Young's co-managing partner for the Far East, although he relinquished his other role as chairman for China and Hong Kong on September 30, the day after Ernst & Young's premises were raided by the Commercial Crime Bureau.

Another ex-partner accused of raping Akai by moving it's assets to one of his own companies now settles for US$100m.

The HK police have opened an investigation into E&Y forgery (going by their record this won't amount to much) but hopefully they will open another case into Ho and Grande, not to mention the Akai founder, Ting.

HKEX does what it does best... sweet FA.

SCMP:

Akai saga ends with 'US$100m payout'
Naomi Rovnick
Oct 06, 2009


Almost a decade after the spectacular collapse of Hong Kong electronics conglomerate Akai, the saga has ended with the failed firm's liquidators securing a major moral and financial victory for its creditors.

Hong Kong tycoon Christopher Ho Wing-on and his locally listed company Grande yesterday settled a High Court case brought against them by Akai's liquidators, Borrelli Walsh. The payout exceeded US$100 million, people familiar with the negotiations said.

Borrelli Walsh began suing Ho and Grande for up to US$500 million in late 2007. They claimed Ho conspired with Akai's former chairman James Ting to strip the failed company's assets, so there was nothing left in the business for its creditors. They have also claimed Ting plundered US$800 million from Akai, concealing the thefts with the use of fake bank accounts and fabricated investments. Ho and Grande have denied the claims against them.

On September 23, Borrelli Walsh wrested about US$400 million out of Akai's former accountants, Ernst & Young Hong Kong, which it had accused of audit negligence. The accountant's defence collapsed after the liquidators said the firm had falsified some of its evidence. Hong Kong police are now investigating that claim.

Akai collapsed in 2000 owing more than US$1.1 billion to creditors, including HSBC (SEHK: 0005, announcements, news) and Standard Chartered. When liquidator Cosimo Borrelli took charge of the business in 2001, he found just US$167,000 worth of cash and assets, according to previous court rulings. In the mid-1990s, Akai had more than 100,000 staff and owned brands including America's Singer Sewing Machines, Akai Electric and Sansui.

In November 1999, Ting and Ho injected all of Akai's businesses into Grande, according to multiple court rulings. Akai's shareholders and banks were not told about the deal, which the Hong Kong Stock Exchange has never investigated. EY Hong Kong was alleged to have advised Grande on the transaction.

Ting was imprisoned for false accounting in 2005 but released a year later on appeal, following errors in the prosecution's case.

Grande Holdings now licenses the Akai and Sansui brands to electronics manufacturers, according to its most recent annual report.

The settlement has saved Ho from a potentially embarrassing session in the witness box. He was due to be cross examined by the liquidators' barrister Leslie Kosmin QC.

Last week Ho, through his lawyers, told the court he borrowed HK$500 million for gambling from Sociedade de Turismo e Diversoes de Macau, casino mogul Stanley Ho Hung-sun's holding company. Kosmin said the loan document the Grande boss provided did not look authentic.

In February, Mr Justice William Stone froze Ho's assets to stop him potentially shielding his wealth from the liquidators.

Ho breached the terms of that order by "siphoning" HK$300 million of cash through his family trust, Stone wrote on September 1. Ho then lost control of all his assets, which the judge placed into receivership. With the settlement, this order has been reversed.

Ho, who did not appear in court yesterday, could not be reached for comment. Grande could also not be reached.

"97pc oppose railings plan but it's still not died"

Title of an article in the South China Morning Post, which has become a show piece of the local language teaching system instituted by Tung Chee Wah.

Local reporters and editors producing a paper chock full of grammatical and semantical errors.


"97pc oppose railings plan but it's still not died
Daniel Sin
Sep 27, 2009


Despite overwhelming opposition to railings proposed for Old Peak Road, the Central and Western District Council and the Transport Department are not willing to abandon the project."

First Natural (1076) - The Chairmans alive!

So this bastard Yeung Chung Lung with the retarded son is not only still alive but is contesting ownership of a public company in a court in China. So WTF has been in control of this company since it's suspension and mass resignations in December last year?

Has the CEO of a public listed company defected and is still in control? Who has been writing the cheques? WTF has the liquidators been doing? Has the company assets been stripped?

Why are these questions been asked? How the hell does a chairman maintain control of a company after 'disappearing'?

Another example of the risks in investing in small/medium sized companies in China.

Today's filing

HK IPO Scams

In HK Today: $300k IPO scam gets 9 months, $100m scam gets.... friends in high places!!

"Four stock punters who fraudulently submitted multiple applications to boost their odds of subscribing to shares in initial public offerings have each been jailed for nine months."

Guaranteed IPO stock allocations in HK

Shirley Yam, one of the only handful of quality reporters in SCMP does this piece..

"Wouldn't it be great if someone offered you a guaranteed supply of the sought-after shares? Wouldn't it be even greater if someone offered you a guaranteed "bigger than usual" supply of every new offering in the coming months?

I know of such a lucky guy. Let's call him Mr Chan. Via an intermediary, he hooked up in July with someone that offered such a service.

The service isn't cheap. He has to give half of any profit to his counterpart, that is, he bears all the cost, risk and 50 per cent of the profit. And to get into the game, he has to put in bets with a minimum of HK$100 million."

Australia the racist country

Not content with killing off the aborigines, the rednecks have turned on Indians

"He said 15 to 20 people were believed to have watched the assault and were yelling racial abuse when police arrived."

With the help of the police..

The four arrested men, aged between 20 and 30, were later released without charge. Police are now seeking witnesses.

Nothing wrong with a bogus degree

We have "every confidence" in the way we vetted the candidate and that it's a piece of paper... like any other degree. It's not just Neo-Non (0583.HK) it's Really-Non.

"The company would like to confirm that [its chief executive] Dr Tseng Jinsui has obtained the doctoral degree in computer science from Edenvale University through required procedures," said a Neo-Neon spokesman.

Firefighters to strike over 'extravangant' managers

The managerers will go on strike in retaliation for bad spelling..

Auckland firefighters will go on strike tomorrow and hold their protest at the opening of a new $4.9 million station.

The firefighters would be striking at the opening ceremony of the Mt Roskill station at 11.30am, Auckland Firefighters Union president Jeff McCulloch said.

The firefighters were protesting against their stalled contract negotiations and because they believed senior Fire Service management had made bad and extravagant decisions, including funding the new station.

Senior managers had also "wasted" $500,000 on consultants advising on the refurbishment of the Central Auckland Fire Station, despite firefighters who worked there telling them repeatedly it was not necessary, Mr McCulloch said.

"The list of extravagances and terrible decisions goes on and on, and the waste of public money continues with no-one being held accountable."

Neo-Neon CEO's bogus degree

From Mary Ma's bitch..

Neo-Neon CEO's bogus degree
14th September 2009

Congratulations to "Dr." Tseng Jinsui, who has just been appointed as Chief Executive of LED-lighting maker Neo-Neon Holdings Ltd (1868). The announcement states:

"in 1991, Dr. Tseng got his doctor's degree in computer science from Edenvale University, the United Kingdom."

Edenvale University is not a "recognised body" with degree-awarding powers in the UK. A list of those which can award degrees is on the web site of the UK Government's Department for Business Innovation & Skills, which also warns that it is an offence in UK law for any other organisation to offer a degree which could be taken to be that of a UK institution.

SFC enforcer still waiting for new contract

This guy is obstructing "business" in HK and he's going to get replaced with someone more conducive to the "business" of fleecing investors.

"As head of the financial regulator's enforcement division, Mark Steward has for the past three years been the driving force behind a crackdown against those involved in illicit deals.

But with less than two weeks left on his contract, there is a deal of his own that remains in doubt. The Securities and Futures Commission executive director is still waiting to find out whether the government will give him a new term.

"

"His comments, first reported in Ming Pao, have fuelled speculation that the government is under pressure to either replace or clip the wings of the man who is widely credited with the adoption of a hardline approach by the SFC against those who breach market rules."

Chinese officials threaten to blow up family's dam

Official extortion

''Foreigners should not invest in China. It's no use. When they see something valuable, they steal it.''"

Wuliangye Yibin investigated for securities law violations

"Wuliangye Yibin, one of the mainland's largest liquor makers, is under investigation by the China Securities Regulatory Commission for alleged violation of securities laws, the latest sign that fraud still plagues the nation's equity markets"

Former Easyknit Group Chairman accused of blackmail

"Ex-company boss accused of HK$135m blackmail
Loretta Fong
Sep 09, 2009

The former chief executive of the Easyknit Group, Matthew Koon Wing-yee, and three others threatened a businessman and demanded that he give them 100 million shares in his company after losing money trading the shares, the Court of First Instance heard yesterday.

The allegation was made by a lawyer for the businessman as part of civil proceedings in which the man, known only as X because of an order in another court preventing the publication of his name, is claiming HK$135 million from the four.

Daniel Fung Wah-kin SC read a statement from X in response to an application by Koon, Ng Chi-keung, Chan Kwai-nam and Wong Chin-yick to lift an interim injunction granted earlier that froze the HK$135 million X is seeking - equivalent to the value of the shares."

Source of Singaporean Wealth?

``Actually, Singapore's success came mostly from being the money laundering center for corrupt Indonesian businessmen and government officials,'' Xie wrote in the e-mail. ``Indonesia has no money. So Singapore isn't doing well.''

Canton Chairman nailed

Bank president authorizes $500+m to his cronies, no doubt getting kickbacks, he (Liu Chanming) then disappears.

One of the thieves will now face a trial which no doubt will end sadly in some back gully. More of the missing funds will no doubt be used to buy more protection services from the 'authorities'.

The loans were allegedly channeled through subsidiaries of Canton Properties, which suspended trading in its shares after Wang disappeared in August 2008 and most of the company's board resigned.

Public company, Private bank

Sea Holdings Group (0251) on the HK stock exchange.

A 97% owned subsidiary, Asian Growth Properties Limited:

Results for the six months ended 30th June, 2009.

Balance sheet:

From the Notes:

16. AMOUNTS DUE FROM/TO A MINORITY SHAREHOLDER

The amounts are unsecured, interest free and repayable on demand.

USD$2m for a shareholder, Chairman's mistress? Got to pay it back if she strays. Nice work if you can get it.

Much better terms than any private bank.

Another chairman disappears

Hopson sheds no light over missing chairman
Naomi Rovnick and Peggy Sito
Sep 01, 2009

Hopson Development Holdings (SEHK: 0754) was unable yesterday to clarify the whereabouts of its chairman, Chu Mang-yee, who investors, analysts and bankers claim has not appeared in public for more than six months.

However, chief executive Chen Changying did say Chu had not attended the property developer's most recent board meeting.

Brain fart of a CFO when asked....

Hopson chief financial officer Zhao Mingfeng, who was also asked about Chu's attendance at board meetings, said: "Why should I explain to you when he attends board meetings? This is your own concern, you should solve the problem by yourself."

China investment risk

Frightening article highlighting the lack of regulations in China, which unfortunately happens too often. Management gain owernership of companies through opaque background dealings and the lack of regulatory control and enforcement.

The safest path of China investment is in large cap/quasi government companies which can both withstand and punish (bullet in head) fraud.

Things didn't get better for them. Soon, they were told a new company was prepared to buy the main company's assets for $298 million as part of a restructuring plan. The plan would pay foreign creditors even less for their debt than Mr. Kwong's earlier offer, according to a preliminary estimate: senior-note holders would receive about 20 cents on the dollar, while the PIK noteholders who were owed a total of around $800 million, would receive just one cent on the dollar. That compared with 13.5 cents in the previous offer.

The buyer, called Golden Concord, immediately aroused suspicions among some investors because its management included unidentified Asia Aluminum executives. Creditors say Asia Aluminum's court-appointed receivers told them Mr. Kwong had no financial interest in Golden Concord, but little else.

Golden Concord didn't respond to requests for comment.

"I'm amazed the employees of a bankrupt company would have so much money that they could take it over," says Damien Wood, head of credit research for Asia ex-Japan at Credit Suisse in Singapore. "It just raises massive questions everywhere."

Some creditors tried to fight that plan, enlisting Norsk Hydro, a Norwegian aluminum maker, as a white knight. But even before Norsk Hydro could make a firm offer, government officials in Zhaoqing, the city where Asia Aluminum's facilities were based, issued a statement saying that they weren't interested.

Australian = racists?

No doubt about it, rednecks abound asunder...

"In Brisbane, the research suggested Chinese job hunters faced the greatest discrimination, having to send out more than double the number of applications to get the same results as their Anglo-Saxon counterparts."

Chaoda's largest supplier

From the 07/08 Annual report. The chairman Kwok owns 95% of the largest supplier to Chaoda!

Percentage of total purchases

The largest supplier 42%

Five largest suppliers in aggregate 61%

Percentage of total sales

The largest customer 3%

Five largest customers in aggregate 13%

The largest supplier of the Group, Fujian Chaoda Trading, is a 95% owned subsidiary of Fujian Chaoda Group Limited,

a limited company incorporated in the PRC, which is owned as to 95% by Mr. Kwok Ho, the Chairman and an

executive director of the Company.

SFC files criminal lawsuit against Vongroup chief

The SFC is finally waking up after it's victory in the PCCW vote rigging case ("here are shares for your bonus but you need to sign over proxy"). Chaoda next?

Enoch Yiu
Apr 24, 2009     


The Securities and Futures Commission continued its crackdown on market malpractices yesterday, with its first criminal case against a chief executive of a listed company for giving misleading information to the market.

The SFC started proceedings against David Vong Tat-ieong, the chief executive and major shareholder of Vongroup, which operates a smart card finance and restaurant business, for allegedly failing to disclose key information to investors in a deal he made with investment bank ABN Amro in 2007.

Vong appeared in the Eastern Magistracy yesterday but the case was adjourned to May 29, pending an application to transfer it to the District Court.

This is the first criminal prosecution on misleading market information after it became a criminal offence under the Securities and Futures Ordinance introduced in 2003.

PCCW vote exposes the huge flaw in HK's rules

 MONITOR
Tom Holland
Apr 07, 2009     
   
It goes against the grain to applaud Richard Li Tzar-kai for anything, but in one way at least Hong Kong owes the PCCW (SEHK: 0008) chairman a vote of thanks.

If he hadn't launched his bid to take PCCW private through a so-called "scheme of arrangement", none of the subsequent allegations of an attempt to rig the shareholders' vote in favour of his proposal would have arisen.

Without those allegations of skullduggery, and the Securities and Futures Commission investigation that followed, most of us would never have realised just how full of holes the regulations governing such schemes of arrangement in Hong Kong really are.

Instead, thanks to Mr Li, our regulatory shortcomings have been stripped bare and exposed to the harsh glare of public scrutiny.

It should be obvious to the city's policymakers that the rules governing buyouts through schemes of arrangement are not only woefully inadequate, they actually invite manipulation.

Schemes of arrangement, in which proposals are put to an all-or-nothing vote, were never really meant to decide buyouts. They were supposed to be used for agreeing settlements between insolvent companies and their creditors.

But they also come in handy for clinching the approval of minority shareholders in takeover deals. Unlike a general offer, which can be time-consuming - and therefore expensive to finance - schemes of arrangement can be concluded much more quickly and cheaply, although they may carry a higher risk of failure.

Under a scheme of arrangement, the proposed buyout is put to a vote of minority shareholders. To win, a proposal must gain the support of 75 per cent of the shares voted by value, with no more than 10 per cent of all eligible shares voting against.

But schemes of arrangement must also satisfy a third condition, originally intended to protect small creditors from being steam-rollered by larger ones in a debt workout.

Known as the headcount rule, this states that to succeed, a proposal must also win the approval of at least half the number of voters present at the meeting, regardless of the value of their holdings.

In other words, 50 people each with 1,000 shares voting against a deal can defeat 49 shareholders each with a million shares voting in favour.

This sort of provision might make sense in agreeing a debt workout, but because of a quirk in the way things work in Hong Kong, when it comes to approving shareholder buyouts, it leaves the process vulnerable to all sorts of knavish tricks.

That's because very few shareholders are actually registered as the owners of their shares. Most minority shares - 94 per cent in the case of PCCW stock - are held in electronic form in accounts at the Central Clearing and Settlement System (CCASS) and registered as belonging to Hong Kong Securities Clearing Company.

Usually this isn't a problem. In a normal vote, shareholders forward their voting intention to CCASS, which sorts the shares it holds into two blocks - one for yes, one for no - which it then votes according to the owners' wishes.

But when it comes to a headcount vote, it's a huge problem. Because the registered owner of their shares is Hong Kong Securities Clearing, all the thousands of individual investors who hold their shares through CCASS count as just two shareholders under the headcount rule, one voting in favour and one voting against. Those two votes cancel each other out, which means most investors who own electronic shares have no say under the headcount rule.

That makes headcount votes laughably easy to manipulate. So, for example, if you are a large investor who wants to ensure the success of a deal threatened by opposition from small shareholders, all you have to do is buy a chunk of stock and parcel it out to several hundred of your friends, family and employees. You ensure their names are entered in the register as the shares' owners, and get them to sign proxy forms nominating you to wield their shares in the vote.

You then toddle on down to the shareholders' meeting, where as the nominee of several hundred registered shareholders, you get to exercise several hundred votes when it comes to the headcount.

The chances are that because only a tiny minority of shares are registered in owners names rather than as belonging to Hong Kong Securities Clearing, you will win the headcount by a landslide, ensuring the deal goes through.

In most cases this tactic, known as share-splitting, is perfectly legal. In fact, it is commonly used by hedge funds arbitraging between the market price and the bid price in takeover deals.

But if the shares are handed out and voted at the instigation of someone connected to the buyout proposal, it is highly illegal.

That is pretty much what the SFC alleges happened in the case of Mr Li's proposed buyout of PCCW.

The judge disagreed yesterday in the Court of First Instance, and whether the appeal court judges will decide differently remains to be seen.

In any case, it is clear that the rules governing headcount votes in schemes of arrangement are seriously flawed and should be changed.

Most observers argue that the answer is to get rid of the headcount vote altogether.

But the rule is there for a reason: to protect small shareholders. Far better would be to change the way shares are held by CCASS so that their ultimate owners can be registered by name. That way the headcount vote would reflect the wishes of all voting shareholders, not just a tiny minority.

Either way, ultimately it was Mr Li who highlighted the deficiency of the regulations, so we really should offer him a vote of thanks - except of course someone would probably try to rig it.

tom.holland@scmp.com

IPCC may carry out more spot checks

IPCC may carry out more spot checks
Phyllis Tsang
Apr 07, 2009     

The head of a fledgling police watchdog has urged more spot checks into how police investigate complaints against them, suggesting police record all interviews when investigating complaints.

The Independent Police Complaints Council (IPCC) will become a statutory body in June if the legislature approves the ordinance commencement notice next month.

Its launch and financial arrangements were discussed in a Legislative Council subcommittee meeting yesterday.

IPCC chairman Jat Sew-tong yesterday suggested the police force's Complaints Against Police Office (Capo) record all its interviews with complainants, so that IPCC observers could review them at any time.

Currently, Capo issues a list of interviews usually 48 hours before they are conducted at various police stations. But concerns have been raised that police officers are sometimes tipped off before observers arrive.

To give observers more time to prepare, Mr Jat suggested Capo extend the notice from 48 to 72 hours, and record the conversations.

"All the interviews could be recorded ... so that IPCC can conduct spot checks more effectively," Mr Jat said.

Under the IPCC scheme, observers will be able to attend interviews and watch the evidence-collection process. Volunteer observers are listed as on duty over a certain period - for example two weeks - but they are not committed to go to any particular interview.

Mr Jat yesterday suggested observers be committed to work on fixed dates, so that they can watch any interview at any police station during that day.

The IPCC has also appointed a private opinion polling centre to conduct a poll on public understanding and expectations of the IPCC.

PCCW vote buying

Their confidence was well placed as apparently they have bought more than votes..

Court approves PCCW buyout, SFC to appeal
Reuters in Hong Kong
5:00pm, Apr 06, 2009     

A Hong Kong court said it would allow controlling shareholders of PCCW (SEHK: 0008) to proceed with a US$2.2 billion privatisation of the telecom firm after finding against the city’s securities watchdog in a case over alleged vote buying.

The Securities and Futures Commission (SFC) quickly said it will file an appeal against the decision allowing a company associated with PCCW Chairman Richard Li Tzar-kai, and China Netcom, to proceed with their buyout offer.

“I have concluded that the statutory majority who voted for the scheme were acting in bona fide [good faith] and were not coercing the minority in order to promote an interest adverse to those of the class whom they represented,” the verdict issued by High Court Judge Susan Kwan Shuk-hing said.

“On the evidence before me, I am satisfied that the scheme is one as to which an intelligent and honest man … and acting in respect of his interests might reasonably approve,” Madam Justice Kwan said, in a written judgement. “I therefore exercise my discretion to sanction the scheme.”

PCCW vote buying

Puppet Master: ??

Deputy Puppet Master: Francis Yuen - ex stock exchange CEO, ex chairman Pacific Century Insurance, present deputy chairman  Pacific Century Regional Developments

Puppet controller: Lam Hau-wah: regional director, Fortis Insurance (Asia) (formerly Pacific Century Insurance Company Ltd)

Puppets: 465 Fortis insurance employees

Cost of Deal: $15B HKD

For privatizations in HK there has to be supported by >50% number of shareholders and >75% share holders. Since many public companies are family controlled (minimum 25% of shares with the public) they can get past the later hurdle easily. In this case to get over the 50% number of shareholders hurdle, 500,000 shares were bought (500 board lots) ~@ $3.5/share, total $1.75m HKD and were distrubed to Fortis employees in exchange for signing a proxy in support for the PCCW privatization.  This exchange was described in various terms as a "bonus" by Yam Hau-wah who obviously has a warped sense of what a bonus is.  

Michael Todd QC, counsel of PCCW, descended from an alternate universe, reading from the 1984 playbook, argued that the SFC was "attacking innocent people such as PCCW's minority shareholders". An absurd argument that reflects the hubris behind the main business players who expect to steamroll the SFC and HK government as they have done in the past.

Expected verdict: Spirit of the law was violated but is legal. PCCW will be privatized, main players will grant themselves a huge cash dividend to pay for the deal and get the rest of the upside. Minority shareholders can work hard for the next 10 years to repair their balance sheets until they forget and buy into another Tom IPO.

Peter Lindner seeks election to board of American Express

The annual shareholder meetings are cosmic burp in an alternate universe with old ladies grilling the CEO on cost control now this... (April's fool?)

SEC filing:

" Sometimes (and I have been wrong about this

in the past), there is a new wave sweeping   across the  country for     a revision of ethics.  I wish Amex to lead   the country in having a  good code     of conduct, rather than have   incidents occur periodically that cause  pain,     embarrassment, and social/financial disorder - which has happened in  the US Congress and   in companies such as Enron." 

"Mr. Lindner is a former Senior Manager of the Company.   He is an

experienced  computer programmer, modeler, database marking specialist -  and is  literate." 

Some justice at last..

Businessman wins compensation for unlawful arrest nine years ago
Yvonne Tsui
Apr 01, 2009     


A businessman was awarded HK$25,000 in compensation yesterday for not being sufficiently informed of the alleged offence when he was arrested by a police officer nine years ago.

Leung Kwok-hung, who formerly ran a limousine service business, won the compensation from the government in the Court of First Instance. But Mr Justice Johnson Lam Man-hon rejected Mr Leung's other claims for a total of more than HK$1 million in damages sought over the arrest made in 2000.

The judge found Mr Leung's arrest by the police officer on June 1, 2000, at the Lo Wu checkpoint was unlawful.

He ruled that the arresting officer had not provided sufficient information to Mr Leung as to the reasons for the arrest, which infringed on Mr Leung's civil rights.

Mr Leung had only been informed that he was being arrested in relation to a case of using a false document and was told the case number was registered at the then Central Police Station.

The judge said such "legal information" was insufficient because the case number was meaningless to Mr Leung and the police officer did not tell Mr Leung the relevant offence date or venue, or the nature of the alleged document, which were the factual grounds for the arrest.

In his claim, Mr Leung accused the police of abuse of power and unlawful imprisonment. However the judge rejected his claims on those grounds, finding that Mr Leung was properly informed and cautioned when he attended an interview at the police station.

The judge ruled that the arrest was lawfully made at the police station.

Mr Leung also complained it was a malicious prosecution and excessive force had been used by police when officers handcuffed him during the time he was escorted from the immigration checkpoint to the police station. However, the judge also rejected those claims.

Democratic Party chairman and lawmaker Albert Ho Chun-yan said the judgment would encourage people to bring litigation against the misuse of police power. 

Fringe benefits for HK's finest

HK's finest : experts at gathering evidence!!

Vice cops defend sex ops

Diana Lee

Wednesday, April 01, 2009

Police chiefs are insisting on a "closed door" meeting to explain why undercover agents sometimes need to be "manually stimulated" by sex workers to get enough evidence to secure a vice prosecution.

The move came after lawmakers asked them to justify why they have not given up the practice of accepting limited sexual services in some investigations in line with overseas jurisdictions. 

Mugabe and the hk politician

Evil and incompetence. Lady Grace(less) Mugabe comes to HK and punches a reporter with diamond encrusted fingers in the face drawing blood. She is allowed diplomatic immunity but is not banned from future visits. Justice(less) Wong Yan-Lung proposes that "The police can stop Zimbabwean first lady Grace Mugabe from hitting someone in Hong Kong if she tries to do it again".

Now, how exactly are the police going to prevent her, especially if she is above the law? Maybe Grace will provide her "beat the shit out of a reporter" schedule in advance enabling the keystone cops to be there to "prevent" her from punching the shit out of someone - maybe by putting their faces between the diamond encrusted fist of evil and it's target?

Next time, Mugabe's wife could face action
Ambrose Leung
Mar 31, 2009     


The police can stop Zimbabwean first lady Grace Mugabe from hitting someone in Hong Kong if she tries to do it again, even though she has diplomatic immunity, Secretary for Justice Wong Yan-lung said yesterday.

But although the justice chief assured lawmakers that the government had raised with the central government concerns about an earlier assault case involving Mrs Mugabe, he admitted nothing more could be done to pursue the case.

Mr Wong was speaking at a meeting of the Legislative Council justice and legal services panel after lawmakers expressed anger over the case, in which the government was told by the Foreign Ministry's office in Hong Kong that Mrs Mugabe could not be prosecuted because of her immunity.

HK finest shoots homeless man on remote hillside threatening the fauna

In an suprising event, HK's finest shoots and actually hits his intended target. Unfortunately it was an ill thought out and shocking target. "In danger of his life" from a chair wielding homeless man, HK's Rambo shoots the homeless guy in the head after exhausting "all possibilities". Possibilities that didn't include him warning in English in addition to Cantonese or moving away to a safe distance before reinforcements arrive. Maybe HK's finest should spend more time on the streets confronting citizens and checking IDs and save lives by keeping them away from these situations.

Hopefully HK's finest Rambo is as successful with his aim when he turns the weapon around.

"

Wednesday March 18 2009

Suspect dies after officer's shot to head Clifford Lo and Phyllis Tsang A suspected illegal immigrant who attacked a police officer with a wooden chair died in hospital last night after the constable shot him in the head at close range. The officer shot at the middle-aged South Asian man twice after using up his pepper spray, dropping his baton and falling to the ground during the attack on a hillside in Ho Man Tin, police said. The first shot missed but the second hit the man in the head. He was taken to Queen Elizabeth Hospital, where he died at 6.34pm. The police officer, attached to the patrol sub-unit of Hung Hom police station, suffered injuries to his arms and back. He was discharged from hospital after treatment. Preliminary investigations had showed the constable was justified in shooting because his life was in danger and he had exhausted all other possibilities, police said."

HK Finest (at fraud)

Retired policeman jailed 4 years for fraud

Retired Detective Senior Police Constable Poon King-chuen has been jailed four years by the District Court for perversion, forgery, deception and making a false report to the Independent Commission Against Corruption.

 

Poon, 49, was found guilty of eight charges - one of conspiracy to pervert the course of justice, three of perversion, one of forgery, one of using a copy of a false instrument, one of obtaining property by deception, and one of making a false report to the ICAC.

 

Three of the offences, which took place May 2 and July 16, 2007, related to a theft case at a department store which was being investigated by Poon. He conspired with a suspect to pervert the course of justice by procuring witness statements to be given in the name of a store security guard which would result in the withdrawal of prosecution against the suspect.

 

Poon informed the suspect to collect from her mailbox copies of two forged witness statements purportedly made by the security guard. In one of the statements the guard purportedly requested to withdraw the complaint of theft against the suspect. The statements, which were not made by the guard, were found to be forged.

 

Poon then made a false report to the ICAC accusing the suspect of offering $4,000 to the guard in return for the latter's assistance in fixing up the theft case against the suspect.

 

Four other offences took place between January 3 and August 29, 2007, and were related to a deception case handled by Poon in 2006.

 

He forged witness statements of three people who had jointly lodged a complaint with the Police against a person accused of obtaining loans by deception. The statements were purportedly given by the complainants to withdraw their complaint.

 

He also made false representations to the complainants the police investigation was still on-going, and there was little prospect of prosecuting the offender. He also claimed another person could assist in collecting the debts and dishonestly obtained $6,000 from one of the complainants.

 

On two different occasions Poon incited, induced and instructed the complainants to make false statements to the Police and the ICAC.

 

On November 10, 2006, Poon also incited, induced and instructed a 14-year-old boy, who was suspected to have stolen a mobile phone, to make a false statement to Police.

First Natural (1076) thieves update

Yeung Chung Lung, 55 - Chairman, Yang Le, 31 (Son), Ni Chao Peng, 33 (Son in Law). First Natural scambags.

The ongoing saga of the missing chairman (Yeung Chung Lung) underlines how "cash in the bank" for China companies is not really cash in the bank.

The Chairman Mr Yeung and his inbred scumbags brood, having looted the company are on the run... probably in Canada or Thailand.

Updated regulatory announcement:

"According to the information obtained by the PRC lawyers, a sum of approximately HK$84 million had been withdrawn in November 2008 from the Company’s accounts maintained with Xiamen International Bank. Such withdrawal was not recorded in the books and records of the Company and had not been made known to the existing Board."

The bunch of assholes have company property, probably in the way of seals and stamps and are probably still issuing company cheques.

"The Provisional Liquidators have engaged PRC lawyers to commence legal actions in the PRC

against Mr. Yeung and Mr. Yang Le [Father and Son] for the possible damages to the Group resulting from their illegal possessions of the PRC Subsidiaries’ properties, including but not limited to, the company chops and statutory certificates of the PRC Subsidiaries."

From the unaudited interim June report of 2008, they had $792m RMB cash and cash equivalents in the bank. At least $82m HKD has been confirmed as looted. They have $400m RMB in debt (not including AR). This leaves them with ~$300m RMB in cash. With 1.2b shares in circulation, this leaves 0.25cents/share in cash and ~$400m in PPE.

The red flag was the HUGE increase in AR which was $292m ($167m in 2007), this suggests that at least $130m was "transferred" in preparation for the year end disappearing act.

FN last traded at 0.295. If and this is a big IF, just $82m and the $130m in AR was looted, the NAV of the shares will be around 0.40 cents.

The auditors are: CCIF CPA Limited, 20F Sunning Plaza, 10 Hysan Ave, Causeway Bay, HK. From their home page are "CCIF CPA Limited is a medium-sized and well-established accounting firm rooted in Hong Kong." Rest assured the shareholders are first and naturally "rooted" and not only in HK.