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.