Stolen in Hainan

A wallet? No, in this case a whole hotel is stolen and a NZ company gets stung. A Cheung Ping Kwong sells the hotel belonging to a joint venture and pockets the money. Going by his name, Cheung is from Hong Kong. Property rights in China?

The December 2009 year annual report noted further legal problems with the Hainan Island hotel. MCK dropped a bombshell on April 12 when it said Cheung had sold the hotel, with other joint venture developments, and pocketed all the money. The loss to the NZ company is about $26.1 million.

....

Chairman Wong Hong Ren and managing director BK Chiu stuttered and stumbled as they explained that a company's seal or chop was the most important feature of a company in China, with its "judicial or legal person". Under Chinese law that person, if he or she has access to the chop, has the power to bind a company without needing any other signature

"Wong and Chiu's tale included threats by criminal thugs, concerns over the safety of the Hainan Island hotel staff and pleas by Wong to the local Communist Party officials."

Sigh,... the officials are the problem.

Another frauditor

To add to the redflag list:

"Four of the firms in this article share the same auditor, Hopkins. Our database shows that it currently has only 6 listed audit clients, including GEG, GGT, MFG and UBS. The other two are Neo Telemedia Ltd (Neo Telemedia, 8167) and Tack Fat Group International Ltd (Tack Fat, 0928), a company we warned the market about twice (in 2005 and 2007) before it collapsed in 2008. It appointed Hopkins on 6-Oct-2009.

Mei Ah Entertainment Group Ltd (MAEG, 0391) owned 3.9% of UBS when it was listed in 2001. In 2007, MAEG was one of three subscribers in a takeover of Neo Telemedia, along with Hanny Holdings Ltd and Hoffman Ma Ho Man, the Deputy Chairman of Success Universe Group Ltd (0487). Hopkins has been auditor of Neo Telemedia since 20-Sep-2005.

Hopkins was also the auditor of Code Agriculture Holdings Ltd (Code Agriculture, 8153) from 15-Jun-2006 to 1-Apr-2009. Code Agriculture was listed as "M21 Technology Limited" on 30-Mar-2001, when it was 29.25% owned by MAEG.

The MD of MAEG, Mr Tong Hing Chi, was an NED of UBS from its IPO until 30-Aug-2005. He was MD of Code Agriculture from its IPO until 31-Oct-2008. He has been Vice Chairman of Neo Telemedia since 1-Mar-2007.

In the past, Hopkins has been auditor of several companies we have written about, including Skyfame Realty (Holdings) Ltd (from 2002 to 28-Sep-2005) and Riverhill Holdings Ltd (from 22-Aug-2003 to 29-Nov-2004). Both companies featured in our "Styland Network" stories of 2002. This was eventually followed by a series of regulatory investigations and actions."

China/HK Fraudsters

CCIF auditors makes another ignominious appearance:

"It also changed its auditors from Hopkins CPA Ltd (Hopkins, formerly Albert Lam & Co) to CCIF CPA Ltd (CCIF), ostensibly because Hopkins was going to carry out an internal control review, although we cannot find any subsequent mention of this review.

The managing director of CCIF is Charles Chan Wai Dune. He and CCIF were recently fined and reprimanded by the HKICPA for a defective audit of UDL Holdings Ltd (the company was not named but we figured it out). CCIF was replaced again as auditor of UBS by Hopkins on 26-Aug-2008. All of the audit reports on UBS since its IPO have been clean."

HSBC chart technical support levels

The current uncertainly requires some superhero support and like clockwork today's chart shows a formation with hero support from.... BATMAN!!!

Unfortunately, the evil HK tycoons have gained the upperhand... which calls for a DOUBLE BATMAN formation!!

Alas, the evil villains have prevailed, but have no fear Don is here. Stay tuned for next week's episode... will HSBC be plundered by a desperate British empire, will the black knight rescue the Euro, will Donald's tongue stick to the red derriere...?

"Sometimes it's only madness that makes us what we are."

David Winters and Jardine

Interesting that David Winters is spruiking Jardines Matheson at it's all time highs, saying one of it's main strengths is "western management" in Asia, inferring something, but nothing good.

Asian Godfathers - Joe Studwell, has this to say...

"If one seeks the worse record of corporate governance in the region over the past thirty years, a serious contender has to be Jardine Matheson, the original white godfather business"

"The Keswick family, who claim to be descended from William Jardine's niece, have treated minority investors in a manner that would make many godfathers blush. In the mid 1980s they created a corporate cross-holding structure within their listed company web that allows the family to run the group despite owning less than 7 per cent of JMH..."

"minority investors,... refer to Jardine's Hong Kong headquarters, with it's distinctive little round windows, as the Tower of a Thousand Arseholes."

HK justice

One year jail for killing someone crossing the road on a zebra crossing.

Judge Kevin Browne: A man with 10 traffic convictions was jailed for a year and banned from driving for three years for knocking down and killing an elderly man walking on a zebra crossing. Wong Wai-hung, 59, who was convicted of dangerous driving causing death after trial, had been fined three days before the crash for using a phone while driving.

However duping young women using superstition into sex gets you 6 years:

Judge Stanley Chan Kwong-chi: had quite a lot more to say about the dangers of superstition when Au Yeung was back in court on January 21 to learn he was off to jail for six years and nine months.

Kingwell (1195) aka Sinotronics makes purchase

Buys 70% of Stephigh which owns 100% of Anlu）for HK$126m. The seller is Mr Hui Lung Hing "Independent party" who purchased the property for RMB21m in July 2008 - a 525% return.

China property bubble - even electronics companies are diving in.

"A gold mine is a hole in the ground with a liar on top.

272 gold companies curently listed on the ASX, of these only 41 have positive cashflow at a time of record high gold prices.

Now who are the terrorists?

"SWAT team breaks into home, fires seven rounds at family's pit bull and corgi (?!) as a seven-year-old looks on.

They found a "small amount" of marijuana, enough for a misdemeanor charge. The parents were then charged with child endangerment."

New Century withdraws Singapore IPO

"Two sources familiar with the deal confirmed a report in the Singapore Business Times on Wednesday that said the Chinese shipbuilder failed to disclose an ongoing legal dispute with a customer that had cancelled an order for two bulk carriers.

The sources declined to be identified because of the sensitivity of the matter.

The two vessels remain on the firm's order books in its initial public offering prospectus, which also said New Century was not involved in any legal proceedings, the paper said, adding a complaint had been made to the Singapore Exchange."

Narcissus Qian

an office worker in Shanghai commenting on the expo. "I see everything related to this event as cheap and lousy."

Interoil

My take on this is that the management are being very very oblique and dishonest with information. The past record of Mulacek lays the roadmap of the future. Probabilities are 95% fraud and the management is threading water. However, 5% chance that there is indeed sustainable gas and they will strike it. Put options payoff about the same as provided by the CDSs before the housing crash.

Interesting article from Sam Atar, former CFO of Crazy Eddie, no doubt an expert at detecting fraud. Not sure if he correctly nails Patrick Byrne (Sith Lord) who has some illustrious pedigree.

"Disclosure: I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes, simply because I could.

If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

I do not own Overstock.com securities short or long. My research on Overstock.com and in particular its lying CEO Patrick Byrne is a freebie for securities regulators and the public in order to help me get into heaven, though I doubt that I will ever get there anyway.

I do research on InterOil for Fraud Discovery Institute. However, I do not own any InterOil securities, short or long.

I plan on meeting corporate miscreants, such as fifth rate crooks like Patrick Byrne, in hell. In addition, it is likely that InterOil CEO Phil Mulacek may join Patrick Byrne and me in hell, too. We will all fry together."