Concentration of small manufacturers.. hurt.

Third troubled Deloitte client in months

Cockroaches everywhere in the kitchen. From today's SCMP.

Eric Ng 
Jun 26, 2012
      


Trony Solar is the third mainland private enterprise client of auditor Deloitte Touche Tohmatsu to have run into accounting disclosure troubles in three months.
Trading of children's wear retailer Boshiwa International's shares has been halted since March 15, after Deloitte resigned as its auditor, sending its share price down by over a third. It was listed in September 2010.




Trading of Daqing Dairy has also been suspended, since March 22, after Deloitte resigned, citing an acknowledgement by Daqing management that certain transactions were fraudulent and difficulties in accessing the local branch of one of its banks. It was listed 21 months ago.


In October, Deloitte quit as Real Gold Mining's auditor following several corporate governance breaches, citing the miner's failure to disclose information that was "highly material" to its 2010 financial statements, and saying its 2010 earnings report was not reliable. Real Gold was listed in February 2009, and trading has been halted since May last year.


A Deloitte China spokesman said the fact Boshiwa, Daqing and Trony had run into their own "unique" accounting difficulties was "a coincidence". He said they accounted for only a "minuscule proportion" of the firm's listed audit client portfoli...

Richly Field China Development Chairman Arrested

The Chairman makes the rookie mistake of crossing the border into HK...

"The board (the “Board”) of directors (the “Directors”) of Richly Field China Development Limited (the 
“Company”, and together with its subsidiaries, the “Group”) announces that in the afternoon of 24 April 
2012, it was informed that Mr. He Guang (“Mr. He”), the Chairman of the Company and an executive 
Director, was arrested by the Commercial Crime Bureau of the Hong Kong Police (“CCB”) in connection 
with an investigation into a suspected offence in relation to knowingly publishing a written statement or 
account of a company about its affairs, which is or maybe misleading, false or deceptive in a material 
particular under Section 21 of the Theft Ordinance (the “Investigation”). Mr. He has been released on 
bail and has not been charged. The Company was also required to provide certain financial information 
and documents of the Group to CCB in relation to the Investigation. Save as disclosed above, the 
Company is not aware of any other employees, directors or related parties of the Company having been 
requested to assist the Investigation."

Where the Fook Woo's management

Management disappears with books...

PCCW (008) Bugging calls?

This can't be true... in the local news.

PCCW being a carrier will have access to ALL calls on their network, even calls over the GSM network as encryption is only over the air. End to end encryption is required if secure communications is required.


"Sunday, Ming Pao Daily
Telecoms operator PCCW (SEHK: 0008) provides anti-eavesdropping service


Telecoms operator PCCW has an anti-eavesdropping service team. Reporters inquired about the service and a staff member revealed the service team, consisting of more than 10 people, was founded more than 10 years ago, originally to serve boss Richard Li Tzar-kai, who needed anti-eavesdropping measures to protect big business deals. The team was later expanded and the service offered to clients such as multinational companies, real-estate developers, casinos and media companies. The staff member said people who wanted to avoid being victims of eavesdropping should use low-end, "non-smart" mobile phones."

HKex investigating some China companies

This article says 3 "private" companies are being investigated and goes on to mention Chaoda, Realgold, China Forestry and Boshiwa,  but doesn't definitively name which companies are being investigated. There is no mention at all on HKex's web site.

It's a start but three companies is a drop in the ocean of fraud on the HKex (where's First Natural?) and it remains to be seen what real penalties can be imposed by the HKex on the mainland based directors who just thumb their noses at the HKex across the border and disappear with the loot.

HKEx goes after mainland firms accused of fraud

SFC proposes to jail banking scum

for misleading IPO material... but this means all the bankers end up in jail?

Now they need to do something, anything, about the vast majority of the Chinese companies listed on the HKex which are blatant frauds.

"Bankers and brokers may be jailed if they fail to ensure the accuracy of listing prospectuses produced by companies they are sponsoring to join the stock market.
Allocating criminal liability for such misdeeds is part of the Securities and Futures Commission's plan to improve market quality in light of recent scandals that have tarnished the image of the local bourse.




Two sources acquainted with details told the South China Morning Post (SEHK: 0583, announcements, news) that the SFC is expected to propose in a consultation paper that sponsors follow tougher due diligence requirements and should face harsher penalties if they fail to check misleading information in listing prospectuses."

Jack Flader

Giving "career advice" at one of the local HK schools. Giving students the proper skills to work on the HK exchange/SFC...

Macau, City of crims

And guess where the funds are coming from..

"HONG KONG—Gambling revenue rose 24% in Macau last month from a year earlier as gamblers from mainland China continued to fuel growth.

Gambling revenue in Macau, the only place in China where casino gambling is legal, rose to 24.99 billion patacas (US$3.12 billion), Macau's Gaming Inspection and Coordination Bureau said Monday. First-quarter gambling revenue rose 27% from a year earlier."

Red storm gathering

The storm had always been here. The shorts are having a party.

Article on the garbage festering HK exchange.

And a breaking story on the ICAC arresting the joint chairmen of Sun Hung Kai Properties, the biggest property company in HK with a market cap of HK$260b (that's after today's drop of 12%).

First Natural: Special Deal for a thief

Can someone who has stolen from and destroyed a company still be a creditor? The thief is still sitting on the stolen subsidiaries in the mainland while the SFC .....twiddles their thumbs.

"Based on books and records available to the Directors and the Provisional Liquidators, Mr. Yeung is a potential creditor under the Scheme. As at the date of this announcement, Mr. Yeung has not filed any claim to the Provisional Liquidators. As under the Scheme, subject to adjudication and adjustment, it

is estimated that approximately 2,500,000 Creditors Shares with the amount of approximately HK$9.7 million as the Cash Settlement together with apportioned part of the realisation of the assets of the Excluded Companies, if any, will be issued and paid by the Company to Mr. Yeung, who is interested in approximately 35.13% of the issued share capital of the Company before the Capital Restructuring, to settle the indebtedness of approximately HK$68 million owed to him. The settlement with Mr. Yeung under the Scheme will constitute a special deal under Note 5 to Rule 25 of the Takeovers Code"

K&L Gates Partner steals $4m

"The money that I stole was used to pay my gambling losses that I have accumulated over the years. I was using one 'escrow' to cover the other. I don't know what the devil got into me. Sorry."

Standard Chartered Bank

One of the best performing banks. Focusing on Asia, Africa and the Middle East, however,..

"Judging from its loan-loss provisioning, StanChart, the second largest bank in the UK by market value, clearly does not see risk building in the system for now.

"StanChart set aside 0.28 per cent of its outstanding loans as loan-loss provisions at the end of 2011, against 1.2 per cent at HSBC and 1.2 per cent at Barclays, according to company figures and Thomson Reuters Starmine."

on the consumer banking front, StanChart has said it will continue to expand into the riskier unsecured lending space, which now makes up a relatively low 17 per cent of its total consumer loan book but contributes for an outsized portion of its overall income."

India has dropped into the waste basket, now ...

"Evidence abounds in Asia that credit quality is expected to worsen soon, however. In South Korea, one of StanChart's biggest markets, average household debt has already exceeded that of the United States just before the 2008 sub-prime crisis."

SFC needs more dimsum

These useless morons with a $1b budget and reserves of $7.4b are out to hire... 7% more useless morons.. Maybe they should start cleaning out the numerous fraudulent companies on the HKex.

"The reserves currently stand at HK$7.4 billion and are expected to rise to HK$7.6 billion by the end of March 2013.

"Under the law, the government and the SFC have agreed that whenever SFC reserves reach a level equivalent to two years' of its expenses, it should suspend or reduce the transaction levy," said Chim Pui-chung, lawmaker for the financial services sector. "The SFC reserve is currently equivalent to seven years of its annual spending, but its budget doesn't mention cutting its levy or other charges."

The current reserves are 7.3 times the SFC's HK$1.01 billion budget for the current fiscal year which ends in March. They could support the SFC's expenditures for 5.4 years, based on its estimated HK$1.36 billion budget for the new financial year which starts on April 1.

"The securities regulator's budget is unacceptable, as it is against the law and is unfair to investors," said Chim. "Why does it continue to ask investors to pay when it is so rich already? The financial secretary should reject this SFC budget as it is against the public interest."

HK Electric Utilities shaken up

The HK government is having second thoughts about allowing the local utilities to get 9.9% ROA from 2008 to 2018 (previously 13.5%). Faced with the usual outcry when the power companies propose rate rises, they conveniently blame the power companies, however it appears the government will move towards changing the Scheme of Control which explains the current weakness in Power Assets (0006) price.

Eudrey Eu (Legislative Councillor, HK Island geographic constituency) has produced this...

"

Creating a sustainable and open electricity market

Hon Audrey EU to move the following motion:

(Translation)

That, given that the Government's signing of the 10-year Scheme of Control Agreements ('SCAs') with the two power companies in 2008 has extended the monopolization of the electricity market by the two power companies and sowed the seed of misfortune that the two power companies can persistently and significantly increase tariffs to 'maximize profits' regardless of public sentiments, for the well-being of the public, this Council urges the Government to:



(a)	require the two power companies to exhaust all room for tariff reduction, so as to lower the rates of tariff increase this year to the lowest levels;
(b)	immediately activate the mechanism for interim reviews, and make public the relevant information and accounts, so as to facilitate public participation;
(c)	launch a review of the two power companies' development plans in accordance with the provisions of SCAs, increase the transparency of the development plans, and require the two power companies to revise their investment plans, revalue their assets, compress costs and rationalize their accounts;
(d)	expeditiously materialize the interconnection between the networks of the two power companies and segregation of the generation sector from the network sector, and introduce third parties to bid for the supply of electricity grids;
(e)	encourage the development of distributed renewable energy power generation facilities and networks, and provide technical support and concessions for connection to electricity grids; and
(f)	adopt all measures to create a low-carbon electricity market which promotes sustainable development and operates with greater competition, openness and fairness, so as to break new grounds in the electricity market. "

S&P cuts Chaoda to 'CCC', keeps rtg on watch neg

6 months from end of financial year and no annual report yet... setting off a vicious cycle of illiquidity

"-- We believe payment acceleration of Chaoda's convertible bond is imminent, and we have insufficient information on the company's current offshore cash balance and other potential sources of liquidity.

-- We believe the company has limited financial flexibility and limited ability to access capital markets.

-- We are therefore lowering the corporate credit rating on Chaoda to 'CCC' from 'B-'. We are also lowering our Greater China credit scale rating on Chaoda to 'cnCCC' from 'cnB'.

-- The ratings remain on CreditWatch with negative implications."

More French wine consumed than produced in China

Paying up for flavored water.... and never noticed any different. French wine tastes better mixed with Coke anyway?

"A market insider reported that annual sales of Lafite wine in the provinces of Guangdong and Zhejiang is over five times the amount imported, with the great majority being smuggled or counterfeit product. An empty Lafite bottle can be sold for 2,000-3,000 yuan (US$313-$470) on the market to be refilled with a fake substitute"

Buffett toying with idiots

"Warren Buffett is ready to call Republicans’ tax bluff. Last fall, Senator Mitch McConnell said that if Buffett were feeling “guilty” about paying too little in taxes, he should “send in a check.” The jab was in response to Buffett’s August 2011 New York Times op-ed, which made hay of the fact that our tax system is so unbalanced, Buffett (worth about $45 billion) pays a lower tax rate than his secretary. Senator John Thune promptly introduced the “Buffett Rule Act,” an option on tax forms that would allow the rich to donate more in taxes to help pay down the national debt. It was, as Buffett told me for this week’s TIME cover story, “a tax policy only a Republican could come up with.”

Still, he’s willing to take them up on it. “It restores my faith in human nature to think that there are people who have been around Washington all this time and are not yet so cynical as to think that [the deficit] can’t be solved by voluntary contributions,” he says with a chuckle. So Buffett has pledged to match 1 for 1 all such voluntary contributions made by Republican members of Congress. “And I’ll even go 3 for 1 for McConnell,” he says. That could be quite a bill if McConnell takes the challenge; after all, the Senator is worth at least $10 million. As Buffett put it to me, “I’m not worried.”

Wog thinks Poms stink?

Racism is fairly ingrained in the Australian culture, but this is tragic..

Teach migrants to use deodorant - Aussie MP