In this case a hedge fund (Start Investments) fights the good fight in China trying to recover it's property.
Chanos (Kynikos Associates) charitably calls this "leakage" and recommends using other markets countries with better rule of law as a proxy for any investments or shorts on China plays. (yes, Jim Chanos obviously has entered his short positions and with the recent burst of publicity is ernestly talking his book.)
There is one other major Fujian company highly touted by analysts and worth watching closely: Chaoda Modern (0682.HK)
The details in today's SCMP, coauthored by the increasingly competent Naomi Rovnick:
Stark Investments, the multibillion-dollar US hedge fund, has scored a partial victory in its long-running cat-and-mouse fight to seize assets from Sun Jiangrong, a Fujian tycoon it is pursuing over a S$120 million (HK$660 million) unpaid loan.
Yet Sun has now twice succeeded in transferring ownership of the real estate company to an outside entity allegedly controlled by his brother-in-law, using slightly different tactics each time.
Sino-Environment has defaulted on its US$109 million of corporate bonds. Its auditors, PricewaterhouseCoopers, said in November last year it could not verify the whereabouts of US$85 million of the company's cash. Sun resigned as chairman of Sino-Environment in January, along with the firm's entire executive board.
The Monetary Authority of Singapore is investigating the company. The Fuzhou police said in January they found no evidence of embezzlement at Sino-Environment.
Yet Sun has now twice succeeded in transferring ownership of the real estate company to an outside entity allegedly controlled by his brother-in-law, using slightly different tactics each time.
Sino-Environment has defaulted on its US$109 million of corporate bonds. Its auditors, PricewaterhouseCoopers, said in November last year it could not verify the whereabouts of US$85 million of the company's cash. Sun resigned as chairman of Sino-Environment in January, along with the firm's entire executive board.
The Monetary Authority of Singapore is investigating the company. The Fuzhou police said in January they found no evidence of embezzlement at Sino-Environment.
What about China Green (another Fujian based company)? Its Chairman is the brother of Sino-E's Chairman.
ReplyDeleteGood point.
ReplyDeleteSun Shaofeng (China Green's Chairman) and owner of Hero is one of the defendants against Stark's legal action.
Another worrying Fujian connection is CCIF CPA Limited is the auditors of China Green and were the auditors of First Natural Holdings (1076.HK) another Fujian company hit by fraud.
China Green also has (had?) $1.3B in cash.
As Charlie Munger says "never is there just one cockroach in the kitchen"