Where the Fook Woo's management

Management disappears with books...

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"

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"

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.

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.

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.

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."

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.

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."

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”."

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."

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."

First Natural 1076.hk: the fraud continues

Liquidators still cannot recover property from the former thieving directors. There has been fraud committed, the courts in some regions recognize that fraud has been committed, however there is no property rights and property in plain sight cannot be recovered. The liquidators cannot even get a hearing in Ningbo. What is the bunch of useless cocksuckers in the SFC/HKex doing?

"Since the appointment on 6 January 2009, Mr. Stephen Liu Yiu Keung and Mr. David Yen Ching Wai, the

Provisional Liquidators, have been investigating into the affairs of the Group and have taken all necessary
actions to preserve the assets and to assess the situation of the subsidiaries of the Company in the People’s
Republic of China (the “PRC”). However, without the assistance of the former Directors, Mr. Yeung and Mr.
Yang, who were the legal representatives of the subsidiaries in the PRC, the Provisional Liquidators would
not be able to proceed the same. As such, legal actions have been taken against Mr. Yeung and Mr. Yang in
respective regions in the PRC for the possible damages to the Group resulting from their illegal possessions
of the properties of the subsidiaries in the PRC, including but not limited to, the company chops and statutory
certificates of the subsidiaries in the PRC. The status of the court cases as at the date of this report is as follows:
(i) Fuqing Longyu Food Development Co., Limited (“Fuqing Longyu”)
The Provisional Liquidators were informed by the PRC legal adviser, based on his recent visit to the
Administration of Industry and Commerce in Fuqing (福清市工商行政管理局) (the “Fuqing AIC”) in May
2010 and to the Foreign Trade and Economic Cooperation Bureau in Fuqing (福清市對外貿易經濟合作
局) (“Fuqing FTECB”) in July 2010, that the changes of the board and the legal representative of Fuqing
Longyu have not been effected despite the enforcement notices having been issued to both authorities
by the Fuzhou Intermediate People’s Court (福州市中級人民法院) of Fujian Province, the PRC.
As such, the Provisional Liquidators have written to the Fujian Provincial Department of Foreign Trade
and Economic Cooperation (the “Fujian FTECB”) (福建省對外貿易經濟合作廳), the Hong Kong Economic
and Trade Office in Guangdong of the Government of the Hong Kong Special Administrative Region (the
“HKETO”) (香港特別行政區政府駐粵經濟貿易辦事處) and the Ministry of Commerce of the PRC (中華人
民共和國商務部) informing the difficulties encountered and seeking their assistance in replacing the board
and the legal representative of Fuqing Longyu and are awaiting their replies.
The Provisional Liquidators were informed by the Fujian Branch of Bank of China (“BOC Fujian”)(中國
銀行－福建省分行) in the PRC that the BOC Fujian had obtained a judgment against Fuqing Longyu in
relation to a loan granted to Fuqing Longyu and is taking steps to dispose of certain collaterals to repay
the loan. Since the replacement of the board and the legal representative of Fuqing Longyu has not been
effected by Fuqing AIC, the BOC Fujian has not provided the Provisional Liquidators with the details of the
abovementioned legal action.
(ii) Jia Jing Commercial (Shanghai) Co., Limited (“Jia Jing (Shanghai)”)
After consulting the PRC legal advisers, the Provisional Liquidators are taking appropriate steps to apply
for re-issuance of company chops and statutory certificates of Jia Jing (Shanghai).
(iii) Ningbo Dingwei Food Development Co., Limited (“Ningbo Dingwei”)
First China Technology Limited, a subsidiary of the Company and the immediate holding company of
Ningbo Dingwei, attempted to file a statement of claim with the Ningbo Intermediate People’s Court
of Zhejiang Province (the “Ningbo Court”) (浙江省寧波市中級人民法院) but the filing was denied by the
Ningbo Court. The Provisional Liquidators have been collating further evidence and are taking appropriate
steps to prepare a revised statement of claim to be filed with the Ningbo Court.

Chaoda 0682 love granting options to themselves

but the shareholders don't..

resolution 5(B) "To grant a general mandate to the board of directors to allot, issue and deal with shares of the Company"

passes by a narrow 1.5% margin. Only a matter of time before this house of card collapses.

Rino

by Muddy Waters saying essentially it's a piece of shit:

Auditor: Frazer Frost (formerly Moore, Stephens Wurth Frazer and Torbet)

• RINO’s FGD sales (60% to 75% of revenue) are much lower than it claims. We found that many of its customer relationships do not exist.
• Chinese regulatory filings show that RINO’s consolidated 2009 revenue was only $11 million, or 94.2% lower than it reported in the US. We show that the Chinese numbers are credible.
• RINO’s accounting has serious flaws that are clear signs of cooked books.
• RINO’s management is draining cash from the company for its own business and personal uses. The management is in flagrant breach of its VIE agreements, which require it to pay income to RINO (as opposed to taking it).
• RINO’s balance sheet has an astonishingly small amount of tangible assets for a manufacturer. Rather, it is filled with low quality “paper” assets that balance out the inflated earnings, and likely hide leakage.
• RINO is not the industry leader it claims to be in the steel sinter FGD system market. Rather, it is an obscure company in a crowded field, and is best known for its failed projects. Its reported margins are two to three times what they really are. Its technology is sub-par.
• We are not sanguine about management “borrowing” $3.2 million to purchase a luxury home in Orange County, CA the day that RINO closed its $100.0 million financing.

Art Textile 0565.hk

This company is listed on the HKEX and primary produces textiles. It attempts to be less affected by the vagarities of commodification by moving to highend textiles. Most of it's products are sold in China. Constant mention is made in it's annual reports about attending textile fairs in Paris but no results of these attendances are forthcoming.

This company showed up in my earlier screens with high cash and a low price/book ratio. The key points were: was the cash really there and how shareholder friendly would the management be in utilizing this cash.

Auditor: Deloitte Touche Tohmatsu

2007 Annual Report:

Cash: HKD$487m

All Debt: $10m

Inventories: $25m

Receivables: $62m (Rev: $645m)

2008: Announces deal to purchase factory/land from "third" parties for HKD$174m. The vendor was conveniently established in 14 August 2006.

2010 Annual Report:

Cash: $480m

Debt: $393m

Inventories: $104m

Rev: $801

Receivables: $230m

In the 3 years of this period, management has purchased properties/equipment from a third party. Revenue has doubled, however inventories and receivables have quadrupled resulting in negative cashflow for the last 2 years.

I am leery of the timing and fit of the purchases made in 2007 as well as the ballooning receivables which I believe are destined to go bad ($20m > 90days overdue).

On the scale of stinkiness this Chinese company rates a putrid.

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.