Ocean Grand, Michael Yip Kim Po convicted

Hopefully gets quietly exported to China to be executed..

"Former Ocean Grand Holdings chairman Michael Yip Kim-po, 49, and five others were convicted yesterday of 15 charges over fake and overly expensive purchase orders for metal-processing machinery.
Also convicted were the one-time fugitive's sister, Yip Wan-fung, 42, project director Yip Wai-lun, 45, and three people appointed as directors of shell companies used in the schemes, Keith Siu Kin-fung, 34, Lau Hok-man, 58, and Tsui Pui-sze, 28.

The convictions came after an 84-day District Court trial that began on July 6 last year and heard evidence from 61 witnesses of a web of transactions involving two schemes and tens of millions of dollars between January 2005 and November 2006.

The six had faced 18 charges but three were laid as alternatives and they were convicted of 15, including conspiracy to defraud, publishing a false statement, theft, dealing with proceeds of an indictable offence and accessing a computer dishonestly. "

Universal Travel Group

UTA is a NYSE listed, Chinese based 'online' travel company. A recent blog article by "Bronte Capital" alleges fraud, highlighting a bogus website, strange ticket collection practices, low staffing costs and other financial oddities. The article is obviously written by a short working (successfully) his book with the stock dropping 25% at one stage.

My initial reaction is that this is another Chinese company fraud. The article as written seems be be by someone with little China experience who is heavily dependent on Chinese contacts for his scuttlebut research and smells heavily of a short starting from a preconceived position. How many of the factors can be attributed to the company's amateurism instead of evil is unanswered, however with the reputation of Chinese companies, investors will have a hair trigger.

This is another in the trend of shorts issuing fraud reports on the myriad of suspicious Chinese companies. Orient Paper was another one of these that may or may not have any foundation but have contributed well to the short's profits.

Barron's on Chinese reverse IPOs in the US

Same old modus operandi as what happens in HK. Companies with 3year records under perform by over 70% - the spruikers have already cut and run.

- False financial statements
- Suspect auditors
- Investment banker/hedge fund assholes too eager to get in early

Beware This Chinese Export
Barron's 8/30
By Bill Alpert and Leslie P. Norton

"These companies fall between the cracks of market regulation. The SEC's enforcement staff can't subpoena evidence of any fraudulent activities in China, and Chinese regulators have little incentive to monitor shares sold only in the U.S."

"The Public Company Accounting Oversight Board, established under the Sarbanes-Oxley Act to police auditors, recently warned against lax auditing of U.S.-listed Chinese businesses. The PCAOB plans to ask Congress to lift restrictions on the disclosure of its disciplinary proceedings against accountants. China is one of several nations that won't let the PCAOB inspect the local auditors used by U.S.-listed companies."

"As the "auditor of auditors," the PCAOB has sounded an alarm over the auditing of overseas businesses. A July 12 practice alert noted with concern that 40 accounting firms with five or fewer partners had rendered opinions on companies with China-based operations."