Hunan's Taizinai sacks Goldman

Amazing tale of Chinese corporate malfeasance which unfortunately isn't in the minority for Chinese companies. Only thing missing from the story are the mistresses.

Naomi Rovnick in the SCMP:

As Western investments into mainland companies go, Goldman Sachs, Morgan Stanley and UK private equity firm Actis Capital's decision to plough US$73 million into yoghurt drink maker Hunan Taizinai may qualify as one of the worst.

Factories like temples...

"Li's Zhuzhou facility contains several enormous yoghurt factories built in the style of roman temples, clad with marble, with Pantheon-style columns lined up along one wall of each building, two people who have visited said.

The frontage of Li's office headquarters is a near-exact replica of the Gate of Heavenly Peace in Beijing. That building is so vast that the lobby covers around 7,000 square feet. The founder's office, on the floor above, covers 7,000 square feet as well.

Li also erected a life-sized statue of himself in the Zhuzhou grounds, said to be made of solid jade. The price of the statue, which has disappeared from the facility, is unknown. But the ornament is said to have cost HK$130,000 just to transport from Shenzhen, where Li bought it."

Anyone still think they can consistently make money investing in small to midsize China companies?

HK to allow Chinese auditors

Another blow to investors in HK. The HKex/SFC (who knows why they require two different regulators and where the demarcation is) cannot pursue Chinese companies listed in HK already - check out the list of 'liquidations' that have assets mysteriously disappear (First Natural Holdings).
"A proposal to allow mainland companies listed in Hong Kong to be audited by mainland accountants came under fire from legislators yesterday.

Paul Chan Mo-po, who represents the accountancy sector, said the move could hurt local investors' interests. "This could create a problem, if non-Hong Kong auditors fail in their duty and the local regulator could not directly investigate or punish them," he said.

The proposal, expected to be introduced this year, is an extension of a stock-market rule that allows some Hong Kong-listed firms to be audited by overseas accountants."

What are the chances of the HKex/SFC pursuing an incompetent/corrupt auditor in China?..... ZERO. Secretary for Financial Services and the Treasury Chan Ka-keung is either being disingenuous or just plain ignorant to come up with this gem.

"Chan Ka-keung said that the rules were in line with international practices, and that local regulators could work with their counterparts overseas and on the mainland to solve any problems that arose."

Jim Rogers...

5:40 "America cannot quintuple it's debt again, the UK cannot sextuple it's debt again.... they've shot their wad"

Jim Rogers toying with and putting a flame under some analysts..

Surf porn while Rome burns

SEC staff surfed for porn as US economy crashed

Forge Group (FGE) now trading at $3

Meanwhile down in oz..

The FGE management sold out half their holdings at @$2.10 to Clough. Are these dumbwits still 'excited' about "The Strategic Alliance Agreement provides an operational framework to deliver the expected benefits and facilitate long‐term strategic co‐operation between the companies. " ? A whole wordy explosion of airy fairy flatulence.

Clough has 2.11m shares at purchased prices of $2.10 per share and 31% of Forge. At the recent market price of $3 for FGE, Clough is sitting on a $23m profit which is about the same as what Clough has earned for the LAST TEN YEARS IN TOTAL ($27m).

Forge management has effectively handed control over to Clough, a company that has made losses 3 years out of the last 5. The Forge shareholders can now expect to get really forged, no imagination required to guess who will get the meat and who will get boned.

10 hours of labour to afford a pizza

Jizza Hutt workers can enjoy this lovely large pizza for dinner everyday @HK$208 each. They however need to work 10 hours at Jizza Hutt's hourly wage of HK$21.40 (US$2.80). This is the lowest of HK's major fast food chains so the workers will need to put in some overtime.

Jardines Group which now runs Jizza Hutt in HK, has moved on from running opium to selling pizzas to the natives but in their greed for profits they overlook Henry Ford's idea of paying the workers enough to afford their products.

But then, their worker serfs can just settle for the regular sized pizza and break even with only one day's work.

Dumb fuck award goes to Forge Group (FGE) management

For not only accepting but for soliciting an offer from Clough of $2.10/share. The morons not only short change themselves but also shareholders in pursuing their exit strategy.

Independent advisor says offer is "NOT FAIR AND NOT REASONABLE" and estimates values of shares at between $3.74 and $4.13.

Peter Hutchinson, the Management Director is still bound to selling half his shares and options at $2.10, gives control to Clough at below market price and easily qualifies for senior moron status.

The directors who previously okayed the deal now abstain, while one independent advises against accepting.

The $2.10 which FGE management has accepted is :

• a discount of 18.6% to the closing price of Forge Shares of $2.58 on 13 April 2010, the day before the date of this Target’s Statement;

• a discount of 9.09% to the closing price of Forge Shares of $2.31 prior to the Announcement Date;

• a discount of 0.94% to the VWAP of Forge Shares of $2.12 for the 1 month prior to the Announcement Date; and

• a discount of 1.87% to the VWAP of Forge Shares of $2.14 for the 3 months prior to the Announcement Date.

These fuckers must be desperate to exit and this can't be good news for FGE as an ongoing concern.

Name of the day

Buggle Lau Ka-fai, the chief analyst at Midland

Swiss lambs to the slaughter

Swiss franc offerings gratefully received...

"HK, Fujian hold investment seminar

Hong Kong and Fujian have held a seminar in Zurich to encourage Swiss investors to consider business opportunities in the Pan-Pearl River Delta region."

KPMG makes the news with Hontex

Investors in HK/China sure need to dodge a lot of arrows... first from E&Y with Akai and now KPMG.

The ICAC said Leung Sze-chit, a senior manager at KPMG in Hong Kong, offered a HK$100,000 bribe to a subordinate "as a reward for preparing the accountant's report for the global offering of Hontex".

Laughable that the HK Legislator for Financial Services Chim Pui-chung gets into the act by farting "Who is checking things?". The same Chim Pui-chung who has served time in jail for.... fraud. Whose interests would this character have at heart?

Also laughable that there is some activity trying to airbrush history from the Wiki..

"He was also the legislative councillor from 1991 to 1998 until he was jailed for [[Conspiracy (crime)|conspiring]] to forge documents in 1998.[http://legalref.judiciary.gov.hk/lrs/common/ju/ju_body.jsp?DIS=3934 HONG KONG/SAR COURT OF APPEAL] After his release in 1999, he was re-elected unopposed to the legislative councillor in financial services constituency in 2004.[http://www.asiasentinel.com/index.php?option=com_content&task=view&id=1178&Itemid=32 Hong Kong's Bureaucrats and the Stock Exchange]"