Esprit's (330.HK) delusional plan?

Market cap of HK$14B (peaked over $140B in 2007).

September quarter SSS falling in high single digits. CFO resigned due to 'personal reasons'. Closing 80 non profitable stores.

Plan to spend additional $18.5B in capex and opex in marketing, upgrading designs and stores in the next 4 years. With this spending they expect to expand operating margin by 15%.

All this in the face of increased competition from H&M, Forever 21, GAP,... probability of slowdowns in the European consumer spending and in China where they expect to double sales.

Considering 10year annual run rate earnings of ~$4B Expect more plan tweaking as the results of their 'transformation' comes in the next year or two as they try and nail a fickle discretionary fashion market.

Hero or Zero? Probabilities trend more to Zero, residual value in the brand. Check back in 6months.

Australian proposal to tax efficiency

"The nine-person working group, set up by Mr Swan after the tax summit, is examining a proposal known as Allowance for Corporate Equity, which would apply no tax to the portion of corporate profits necessary to get a reasonable return on equity. Most companies - especially manufacturers - fail to meet that hurdle and would pay no corporate tax.

Banks and mining companies make a much greater return on equity and so would be liable for the super tax on the excess portion of their earnings. A working group member, John Freebairn from Melbourne University, told the conference the super tax rate could be as high as 40 or 50 per cent. He nominated McDonald's and KFC as examples of companies able to make larger than normal profits because of the power of their brands."

Read more: http://www.smh.com.au/business/swan-tax-shakeup-targets-super-rich-20111205-1ofj9.html#ixzz1fiQQSP6i

A healthy dose of skepticism and distrust fences away being a patsy..

" Andrew Ross Sorkin revealed that Paulson had met with the entire board of Goldman Sachs in a Moscow hotel suite for an hour at the end of June 2008. He told them his views of the US and global economies, he previewed a market-moving speech he was about to give, and he even talked about the possibility that Lehman Brothers might blow up. Maybe it’s not so surprising that Goldman Sachs turned out to be so well positioned when Lehman did indeed do just that a few months later."

Congressional Insider Trading

" In the past few years awhole new totally unregulated, $100 million dollar industry has grown up in Washington calledpolitical intelligence. It employs former congressmen and former staffers to scour the halls of theCapitol gathering valuable non-public information then selling it to hedge funds and traders onWall Street who can trade on it."

Chaoda dumping Asian Citrus shares

Selling out 100 million shares @ $4.66 because ...

"In view of the market volatility, the Directors consider that it is in the best interests of the

shareholders of the Company to carry out the disposal of the Placing Shares. The maximum

gross proceeds from the Placing will be approximately HK$466 million and the net proceeds

from the Placing will be approximately HK$461 million, which will be used for general

working capital of the Group.

The Company estimates to recognise a loss of approximately HK$91 million in the accounts

of the Company taking into account the net proceeds to be received immediately upon

completion of the Placing. "

The reason for selling is because of "market volatility"??!! Selling out at near all time lows?

Chaoda reported (end 2010) having ~$2b in cash and supposedly generates ~$3.5b cash from operations is raising cash for general working capital? They have another ~66m shares of Asian Citrus left at $4.66/share (will be much less after tomorrow) is worth another ~$300m.

$2b in cash + $750m in Asian Citrus shares = $2.75b

Market Cap of Chaoda is $3.62b and not much debt.

Smells like desperate cash raising to fill in some holes..

Sino Forest "Not the "Near Total Fraud""

Sino Forest says .. ."We can categorically say Sino-Forest is not the “near total fraud” and “Ponzi scheme” as alleged by Muddy Waters"

To see what a difficult task the Advisors to the Independent Committee had:

- Over 300 bank accounts, only checked 28 of them that contained 81% of the funds. Couldn't check the rest for overdrafts

- Forestry Bureau(s) not willing to confirm agreements since they may not be legal, or they may even be on SF's payroll.

- Third party AI and supplies not willing to provide any information

- Contracts based on verbal agreements and personal relationships

- Internal Sino Forest systems in a mess. Staff using third party email addresses and documents not backed up or deleted.

- Uncooperative management.

- and so on..

Given the extensive and amusing list of "challenges" the IC had in their investigation, Sino Forest management must be awarded top marks for creating such a positive spin in their release, which is certainly entertaining but not very reassuring to shareholders.

Interim report from the Advisors to the Independent Committee.

The ex Chairman/CEO/Founder Allen Chan and Mr Bowland an independent director and member of the 3 person team looking into the fraud allegations must have resigned for no reason at all.

HK finest running brothel

Discipline in those sensitive places.

ICAC arrested 5 of the finest who were running a brothel over 2 floors in a Kwun Tong building. The finest spokesman said, ".. officers should not visit sensitive places when they are off duty" or "They would face disciplinary action..".

Wanted: First Natural Fujian Fujitives (1076.HK)

Thieves wanted by the SFC - Dead or alive, preferably the former....

The SFC is trying to contact these people who it believes have information relevant to a current enquiry. If you know where they are or have information concerning them, please contact the SFC at (852) 2231 1000 or write toleadsplease@sfc.hk.
	Name: Yeung Chung Lung (楊宗龍) Nationality: Chinese Sex: Male Date of birth/ age: 7 September 1952 Place of Birth: China	Descriptive Information: He was the Chairman and Executive Director of First Natural Foods Holdings Ltd (HK listed stock code 1076, now in provisional liquidation) until his office was vacated on 27 August 2009. The 2007 annual report of First Natural Foods Holdings Ltd shows that he was a member of the Fujian Province Fuqing City Committee of Chinese People’s Political Consultative Conference (政治協商會議福清市委員會) and the Vice-president of the Fujian Province City General Chamber of Commerce (福建省福州市工商聯合會). He is the father and father-in-law of Yang Le and Ni Chao Peng respectively. Yeung is believed to be in Mainland China.
	Name: Yang Le (楊樂) Nationality: Chinese Sex: Male Date of birth/ age: Around 35 years old	Descriptive Information: He was the Chief Executive Officer and Executive Director of First Natural Foods Holdings Ltd (HK listed stock code 1076, now in provisional liquidation) from May 2001 to December 2008. He is the son of Yeung Chung Lung. Yang is believed to be in Mainland China.
	Name: Ni Chao Peng (倪朝鵬) Nationality: Chinese Sex: Male Date of birth/ age: Around 37 years old	Descriptive Information: He was the Executive Director of First Natural Foods Holdings Ltd (HK listed stock code 1076, now in provisional liquidation) from May 2001 to December 2008. He is the son-in-law of Yeung Chung Lung. Ni is believed to be in Mainland China.

O Chaoda, where art thou?

Annual report 6 weeks overdue.

Why would a few anonymous, disparaged reports of fraud drive one of largest agricultural companies into a lengthy suspension of trading? No idea where Mr Kwok Ho would be but a high probability that when trading restarts, along with the release of earnings, shorts will be burnt.

Why? The time in suspension would be spent on a cash gathering exercise to reassure the auditors that cash is really there. Borrowing on the underground, moving cash around, producing 'books' showing revenues and calling on favors. Weak shorts will be burnt, good time for longs to exit, stronger shorts will survive.

Wouldn't surprise if the chairman conveniently disappears.

PYE 0577.HK engineers entering film business

The board of Paul Y. Engineering are bored with pocket lining engineers and want to hang out with actresses. Now these engineers are intelligent and they intimately know actresses are attracted either with looks/charm, or money and promises of fame. The later options are decidedly easier so what better than to start your own film company!

Original company activities: building construction, civil engineering, development management, project management, facilities and asset management.

New actress attracting idea:

The Board, in its continuous efforts to explore new projects and

potential business developments that stand to benefit PYE and all Shareholders, has made the decision

to diversify PYE’s business through a series of transactions that would involve PYE undertaking a

substantial capital raising exercise, predominantly for the purpose of funding its involvement in a new

joint venture with market leaders, Legendary and the Huayi Group, to develop and produce films,

predominantly in the English language intended for a global audience, based on Chinese history,

mythology or culture.

Note: Third Avenue has a 10.72% holding in PYI. Given Marty Whitman's views on being an "Outside Passive Investor", and his reluctance to engage in any corporate activism, expect him to liquidate this position.

Asian Citrus abandons supplier

With the spotlights well and truly on Mr Ho, Chaoda and his nefarious fertilizer company, Asian Citrus hopes to slink into the shadows...

From the SCMP:

"Asian Citrus said it "decided not to renew the fertiliser supply agreement with Fujian Chaoda Group", a private company that is 95 per cent owned by Kwok, when it expires next June.

The orange grower, which is 13 per cent owned by Chaoda, said: "Sufficient organic fertilisers can readily be sourced from other independent suppliers at competitive prices.""

Expect Asian Citrus to go down with Chaoda.

One phone call. €982,000

c'est vrai, quoi!

On that day, Areva's then chief executive Yves Lapierre received a phone call from a man posing as a police inspector in France. The "inspector", who spoke perfect, accent-free French, told Lapierre he was investigating a credit card scam involving an Areva employee.

He said Lapierre needed to transfer €982,000 (HK$10.4 million) to Golden Longon to help the French police track down the credit card ring in Hong Kong. He gained the executive's trust by citing information about Lapierre's whereabouts and the first digit of his credit card.

Lapierre became suspicious only after he approved the fund transfer. He asked Areva's security department to verify the identity of the caller, which it was unable to do. Lapierre resigned in February last year, citing personal reasons.

Longon,.. long gone.

Anonymous on Chaoda

Besides issues highlighted here before (lies, incessant fund raising, insider trades, auditors). New stuff on the bogus branding company they use, more detail on Mr Ho's fertilizer company which turns out to be a heap of shit (over 3 BILLION RMB turnover using only $2k worth of fixed assets).

And the SFC/HKEX? Too little too late.

report here:

Chaoda Down 26%. Suspended

Awaiting "price sensitive information".

Considering the drastic crash before the suspension, some bad news has leaked. This will either be permanent or some announcement of a desperate buyback attempt by the management to prop up the sandcastle.

Update... bye bye Chaoda.

"Sept. 26 (Bloomberg) -- Chaoda Modern Agriculture Holdings Ltd. plunged the most in eight-and-a-half years after the Hong Kong government accused it of market misconduct amid allegations the Chinese food producer overstated its land holdings."

Chinese IPOs to hit record in Germany

Paraphrasing the laws of themodynamics: shit will sink to the lowest level of the toilet bowl (unless it floated in which case it will be on the HKEX).

Spot the dichotomy:

"The listing requirements in Europe are less stringent than other overseas markets such as the US, as they are trying to attract high-quality companies amid the current debt crisis," said WeiWei, an analyst at West China Securities Co in Shanghai. "That's why we see a number of companies have gone to Europe for listing."

Pan Sino 0502.HK

A coffee trader in Jarkarta listed on the HKex casino. Lots of cash, trading below book, increasing revs and profits. Last traded at 0.58 with 0.40 in cash/share.

Only problem is fraud resulting in suspension of the shares in 2007. Now the HKex is going to delist it.

What enforcement actions are the SFC/Hkex taking? ... Yes, they're heading out for their 2 hour dim sim session.

Totalitarian HK

The newly appointed Commissioner of Police, the angry bald fat dwarf (Andy Tsang), who true to his promise of toughness, is on a mission of subjugation and violence against the citizens of HK. Men in black can now be seen in public enforcing arbitrary "core security zones", randomly detaining "threats" and obstructing journalists. None of this of course is commanded indirectly or otherwise from the Panda from Beijing.

The HKex/SFC could benefit from a bit of Angry Fat Bald Dwarfism, starting with the carting off it's incompetent management.

China garbage companies on the Singapore exchange

Chinese comedy...

China Gaoxian Fibre Fabric Holdings is the latest Singapore-listed Chinese firm to report accounting inconsistencies. The Zhejiang-based maker of polyester yarn said last month its auditors at PricewaterhouseCoopers discovered the company's bank balance should be less than a tenth of the 1.1 billion yuan (HK$1.32 billion) it reported in its earnings."The exchange's sanctions are limited to reprimand, suspension and delisting," DMG's Tan said. "A share suspension is very frustrating for investors and they're held hostage. In a delisting, they could be staring at negative returns."In the case of FerroChina, shareholders lost their entire investment when the steelmaker was forced to delist in March 2010 after being suspended for over a year. The company, which hired Merrill Lynch in April 2008 as an adviser, defaulted on loans in October of that year, weeks after reporting quarterly net income had tripled.Other stocks that have been suspended include Sino Techfibre, which said a fire destroyed its financial records after reporting accounting flaws, and China Sun Bio-Chem Technology Group, which said a truck transporting its accounting records was stolen.

Increased Complaints about HK Police

This is where the cops can legally stop any citizen on the streets and perform a search on the pretense of investigating a crime or if they suspect a crime is about to be committed. They can then plant evidence.

Real Gold 0246.HK

Here's another fetid diseased company listed on the HKEX, (Charles Li, where are you?). Oh yes, the auditor is Deloitte.

"Wu Ruilin, the controlling shareholder of Inner Mongolian miner Real Gold Mining, pledged a key subsidiary of the listed company as security on loans for some of his private businesses.
Even though he does not own all of Real Gold or sit on its board, Wu signed documents that posted Fubon Industrial, the vehicle holding all of Real Gold's mines, as security for a 240 million yuan (HK$288 million) borrowing facility with Shanghai Pudong Development Bank last October.

The pledge, which was disclosed by Fubon in filings with the mainland's State Administration of Investments and Commerce (SAIC), meant Shanghai Pudong bank may have been able to seize Real Gold's mines if Wu's private companies - part of his telecommunications-to-mining conglomerate Cosun Group - failed to repay their loans."

Donald Tsang and HK Property

This dangerous clown decides he wants to maintain a free market economy yet only wants to partially destroy the property market.

"We will do more to slow it down," he said. "But we believe in the market, though. We don't want to do anything that would destroy the market completely."

Hkex's CEO Charles Li Delusional

Matters in the HKEX are obviously dire when the esteemed CEO of the whorehouse manages to utter gems like this...

"The U.S.-listed Chinese companies running into accounting problems would not have been able to list in Hong Kong, Hong Kong Exchanges and Clearing Ltd (0388.HK) Chief Executive Officer Charles Li told cable network CNBC on Friday."


The fool should take some time to read about the frauds in his whorehouse happening under his watch.... Ocean Grand, Fuji, Chaoda, First Natural, Akai, ...

He follows it up with more pungent garbage:

"He added that while the U.S. exchanges are disclosure-based, the Hong Kong Exchange is prescriptive, requiring companies to do certain things before they list"

How was the IPO application of Resourcehouse approved when it had never had profits?

Resourcehouse cancelled, Chaoda plumbing depths

As expected Resourcehouse IPO has been pulled.

Chaoda, despite the apologists and the frantic share buybacks by it's management continues to sink. It wouldn't be presumptuous to say ALL public Chinese companies are fraudulent, and US companies would have a certain degree, however the level of fraud in Chinese companies is high. When investing in China, assume there is fraud and check the Margin of Safety:

- Is it a large enough company to garner enough attention from the government?
- Will management fraud, result in bullets to their heads?
- Will the company survive such fraud?

The list of Chinese companies that have been decimated by fraud with the management escaping scott free is long and getting longer... First Natural Holdings, Fuji, China Forestry, Yunan Green-Land, ..

Life is cheap in HK

An airline pilot. Leung Chiu-yu (Cathay Pacific) who killed a four-year-old boy on a pedestrian crossing was fined HK$4,000 yesterday.

Judge: Kevin Browne

The HKex whorehouse

Compromising what little integrity the HK market has by exempting Resourcehouse which has never made a profit (probably never will) from it's own rules...

Under rule 8.05(1)(a), in order to meet the existing profit test, a new applicant must have an adequate trading record. This means that an applicant, or its group (excluding any associated companies and other entities whose results are recorded in the applicant’s financial statements using the equity method of accounting), as the case may be, must satisfy the following requirement:
“a trading record of not less than three financial years (see rule 4.04) during which the profit attributable to shareholders must, in respect of the most recent year, be not less than HK$20,000,000 and, in respect of the two preceding years, be in aggregate not less than HK$30,000,000. The profit mentioned above should exclude any income or loss of the issuer, or its group, generated by activities outside the ordinary and usual course of its business;”

Resource house drops IPO price 30%

From $4.48~$4.93 to $3.45

Will be surprising if it's fully subscribed. Expect a 15% drop on open. A good short.

Douche bank reducing Chaoda 0682.hk

	Total number of shares	Percentage figure (%)
Long Position	358,678,707	10.73
Short Position	55,694,469	1.66
Lending Pool	272,916,124	8.16

19. Total shares immediately after the relevant event:

	Total number of shares	Percentage figure (%)
Long Position	90,833,013	2.71
Short Position	55,703,856	1.66
Lending Pool	5,552,550	0.16

Munger

There are a whole bunch of useless helpers (not the domestic ones) in HK..

Finally, I'd like to once again talk about investment management. That is a funny business because on a net basis, the whole investment management business together gives no value added to all buyers combined. That's the way it has to work.

Of course, that isn't true of plumbing and it isn't true of medicine. If you're going to make your careers in the investment management business, you face a very peculiar situation. And most investment managers handle it with psychological denial just like a chiropractor. That is the standard method of handling the limitations of the investment management process. But if you want to live the best sort of life, I would urge each of you not to use the psychological denial mode.

Longtop Auditor's letter

As always, cash is not cash in China. Fake cash, crooked bank officials, local authorities,..

Now how much of Chaoda's $3.0b rmb is actually there?

"As part of the process for auditing the Company’s financial statements for the year ended 31 March 2011, we determined that, in regard to bank confirmations, it was appropriate to perform follow up visits to certain banks. These audit steps were recently performed and identified a number of very serious defects including: statements by bank staff that their bank had no record of certain transactions; confirmation replies previously received were said to be false; significant differences in deposit balances reported by the bank staff compared with the amounts identified in previously received confirmations (and in the books and records of the Group); and significant bank borrowings reported by bank staff not identified in previously received confirmations (and not recorded in the books and records of the Group).

In the light of this, a formal second round of bank confirmation was initiated on 17 May. Within hours however, as a result of intervention by the Company’s officials including the Chief Operating Officer, the confirmation process was stopped amid serious and troubling new developments including: calls to banks by the Company asserting that Deloitte was not their auditor; seizure by the Company’s staff of second round bank confirmation documentation on 22 May 2011

bank premises; threats to stop our staff leaving the Company premises unless they allowed the Company to retain our audit files then on the premises; and then seizure by the Company of certain of our working papers.

In that connection, we must insist that you promptly return our documents.

Then on 20 May the Chairman of the Company, Mr. Jia Xiao Gong called our Eastern Region Managing Partner, Mr. Paul Sin, and informed him in the course of their conversation that “there were fake revenue in the past so there were fake cash recorded on the books”. Mr. Jia did not answer when questioned as to the extent and duration of the discrepancies. When asked who was involved, Mr. Jia answered: “senior management”."

Chaoda 0682.hk chart -24%

Yep, that dip corresponds to the company issuing a statement 'clarifying' an article in Next Magazine. The article basically says that land is missing, in it's investigation 5000mu turned out to be 500mu, covered in rubbish and in no condition to grow anything. Weather was unsuitable and land had been untouched for years. Supposedly technologically advanced equipment turned out to be old tractors, and (broken) scythes.

Ho the chairman purchases 1m shares. Chaoda repurchases 2.2m. Files on the same day in an obvious (or desperate) show of confidence.

Resourcehouse IP cancelled/postponed for 3rd time

Couldn't line up enough suckers..? From the prospectus, it has no operations, and has a non binding letter of funding intent from China Exim Bank. The mama-sans, Msses HKex and SFC as usual, introducing the latest talent to HK's bordello of stock markets.

"As the company requires additional time for certain commercial arrangement, it has decided to postpone the expected timetable for issuing the prospectus,”

Read more: http://www.smh.com.au/business/palmer-yanks-hk-ipo-for-a-third-time-20110526-1f5fd.html#ixzz1NQYRROFO

Resourcehouse IPO

Signalling the market top... first we have a purveyor of used handbags IPOing this week (Milan Station) now we have a real POS ...

Mainland contractors get the work; China Power gets the coal and China Eximbank gets a steady cash flow to pay off the debt and any interest. The profitability of the project, or Resourcehouse for that matter, is not their concern.

But what about Palmer? Won't he, as a majority shareholder, care about profit? It would be good if the project made some profit, but he will be enjoying the royalties anyway. He gets paid 30 Australian cents, plus any inflation adjustment, for every tonne of coal produced. That is estimated to be A$25 million for the first three years of production, according to the draft.

Chaoda reaping the suckers

Same old story. Waits till there is a pop in the share price then raises more capital ($200m bonds).

If successful, the agricultural giant, which has been criticised by analysts for paying too much money for farmland that remains idle, will have raised US$771 million in share and bond sales during the past two years.


Chaoda, which did not respond to emailed questions, said in mail to potential investors it would spend the proceeds from its planned bond sale on expanding its production base and infrastructure.

The company's shares closed at HK$4.89 - a bargain-basement price of 4.5 times forecast earnings.

On March 31, before Chaoda announced its latest fund-raising, analysts at Macquarie accused the company of spending the money it made from its agricultural operations on an "enormous and growing land bank that does not produce revenues".

Macquarie analysts Jake Lynch and Jamie Zhou said the cash Chaoda had raised from regular stock and bond sales "continues to sit on the balance sheet".

In its last set of annual accounts, Chaoda said it had more than 2 billion yuan (HK$2.38 billion) in net cash.

Macquarie estimated Chaoda used only 24 per cent of its land for growing fruit, vegetables or grains, adding the company had never explained in its annual reports what it did with the rest.

There was "no transparency on 76 per cent of the land on the balance sheet", it said.

"The raw fact is that this land generates no revenues now and management cannot tell us when they expect the revenues to commence."

Chaoda, which was founded in 1997 by Kwok Ho, has regularly been mired in controversy since its Hong Kong flotation in 2000.

The company says it is China's largest vegetable grower. But some investors and analysts say this is impossible to prove because the mainland has no formal registry for agricultural land.

In 2002, big four auditor PricewaterhouseCoopers said it could not endorse Chaoda's annual results, and resigned.

The farming firm replaced PwC with the much-smaller CCIF and Baker Tilly, which both stepped down in 2007. It is now audited by mid-sized BDO.

Since 2002, Kwok has gradually reduced his ownership of the company by arranging regular issues of new shares.

The company's chief financial officer, Andy Chan Chi-po, has now sold all his stock, according to Macquarie.

46 companies permanently suspended on HKEX

The HK SFC as incompetent as ever....

"As of March 31, there were 46 companies whose stock has been halted for more than three months.

These include many that have not traded for over a year, with some cases stretching back longer.

Hong Kong has a long code of conduct for listed companies, known as the listing rules. But no Hong Kong government body or regulator has the power to levy criminal penalties or fines on company bosses who choose not to release accounts. In Britain, the Financial Services Authority can impose unlimited fines, while in Australia, the Director of Public Prosecutions has the authority to recommend jail terms for very serious breaches of disclosure requirements.

But when Hong Kong businessmen or mainland entrepreneurs fail to disclose important information, they can relax in the knowledge that a halt in share trading is probably the worst thing that will happen to them.

The result is that shares in companies that keep secrets stay suspended for a very long time. Unsurprisingly, getting stuck in zombie stocks for months, if not years, makes investors furious, as well as very scared.

"You know something is going horribly wrong, otherwise why would companies not publish accounts?" said Claude Tiramani, an emerging markets fund manager at Paris-based hedge fund Lutetia Capital. "But you cannot do anything about it. You cannot get your money out."

As Fraser Howie, a Singapore-based stockbroker and the author of Red Capitalism, put it: "These long-term suspensions are direct evidence the listing rules are a fig leaf, designed to make Hong Kong look well regulated when, in fact, it is not. You would not have all these immobile shares if the regulators or the government could compel companies to release information."

Stock suspensions can be costly for investors unlucky enough to hold a frozen share. If the wider stockmarket is rising, you are losing money. You cannot liquidate your position in a suspended share and put the cash in a stock that is likely to go up. The Hang Seng Index rose 58 per cent last year, so investors in Zhejiang Glass paid a big opportunity cost.

But as a spokesman for HKEx said, there is nothing the exchange operator can do.

"Shares that are subject to trading suspensions are allowed to resume trading only after the company provides sufficient information for investors to make sound investment decisions," he said. In other words, until a company agrees to publish information, shareholders' money stays stuck in a stock that cannot trade.

A spokesman for the Securities and Futures Exchange, which oversees the listing rules, did not respond to an email containing detailed questions."

Zhejiang Glass (00739) Nationalized

The first private company to listed as a H Share, no less is crashing with fraud and burning shareholders. The China state governments are stepping in and taking it's assets. In this case burning it's biggest shareholder the IFC a member of the World Bank Group.

Lasted traded at $2.48 with market cap of HKD$955m. Suspended trading on 20100503.

Last report 2009 (interim):

Net Assets of $2.79b

Interest bearing debt : $5.3b

Cash: $63m

What is Hong Kong's Securities and Futures Commission doing? ... Nothing, this is most useless and incompetent organization on the planet. Their focus it seems is on smaller, easier, local individual targets, like traders manipulating illiquid derivatives.

H Shares - China companies listed on the HK market are riddled with fraud paired with no non-existent enforcement by the SFC/HKEX, a pit covered with SFC's facade of governance, trap laid with shards of sharp bamboo spikes.

Chinese reverse mergers

Article from thestreet.com.. cash isn't cash in China.

"The alleged chicanery has followed a pattern, Qin says. In many instances, "bank employees are colluding with clients. The bank employee would provide us with falsified bank statements."

Hui Xian

SCMP's Tom Holland on Li Ka Shing's yuan based IPO. Now Hui Xian could be translated as "return first", in this case it will be making returns to the old fox Li Ka Shing first...

Lots of noise about it based in yuan, but as Tom's points out, it doesn't matter what currency the IPO is in as the assets are in China and priced in the Chinese environment. Each share represents a 'share' of the assets and what currency is used to price it is moot.

According to Hui Xian's offering documents, if the shares are priced at the top of their indicative range, they will pay a dividend yield of 4 per cent.

That sounds like an attractive proposition at first. But for a real estate investment trust that plans to pay out nearly all its net earnings in dividends, it equates to a price to earnings ratio of almost 25 times.

Now, you can argue that Hui Xian's sole asset, its stake in Beijing's Oriental Plaza retail, office and hotel complex, is a mature investment with a steady, low-risk income stream, and so the offering's valuation is justified.

But the pricing still looks steep, especially when you consider that the value of Hui Xian's underlying property assets will deteriorate to zero by 2049, when its joint venture partnership in Oriental Plaza is due to expire worthless.

In contrast, Hong Kong dollar shares in the GZI real estate investment trust, which manages properties in Guangzhou, are currently priced at around 15 times earnings for an indicative yield of almost 6 per cent.

Yunnan Green-Land Biological Technology

YACF: Yet Another Chinese Fraud

"Yunnan Green-Land Biological Technology, a company traded on the SME board on the Shenzhen Stock Exchange, announced recently that chairman He Xuekui was detained by police for alleged cheating in the firm's initial public offering three years ago. Details of any fraud in the IPO have yet to be made public.

The chairman is the first company executive to have been arrested by police due to misbehaviour in a listing process.

The Green-Land case spooked investors, who fear that a series of similar scandals could be unearthed as the authorities step up investigations into questionable listed companies.

"It could result in another crisis of confidence, though it would not be as severe as the Guangxia scandal years ago," said Guotai Junan Securities analyst Shi Weixiang."

KPMG auditors chowing down with Hontex

scmp:

"Money Chow told the court that Sister Chan had given her an envelope with a box inside during a lunch in January last year.

"I refused to accept it as the company does not allow us to take gifts of more than HK$500," she told the court. "I considered the items inside the envelope could be valuable as Sister Chan tried to hide the envelope from the others"

SHLD last minute pop

It's in the last minute of trading before options expiry and the $80 calls are OTM and are going to expire worthless, what to do?

The chart says it all...

SFC pulls one knuckle out

and prosecutes China Forestry ex CEO. Hopefully the SFC continues to do their job and and pursue the Chinese fraudsters across the border.

The High Court today ordered that interim freezing orders be continued over assets of up to $398,219,458 held by Li Han Chun, the former Chief Executive Officer of China Forestry Holdings Co., Ltd. (China Forestry) and his company, Top Wisdom Overseas Holdings Limited (Top Wisdom) (Note 1).

China Forestry Holdings 0930.HK

IPO'd 14 months ago, suspended and needs a good forest fire to flush out the shysters.

Following the tried and tested IPO flip.. boost the numbers with extraordinary income (property revaluations), IPO the stock to suckers and cash out.

In the offering document, the company claimed that it made net profits of 339 million yuan (HK$400 million) in 2006, 783 million yuan in 2007 and 5.8 billion yuan in 2008,

If it seems too good... it stinks. You can have all this and less on the HKEX. Brought to you this time by UBS and Cazenove.