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%).

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. "

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..".

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.

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.

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."

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

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.

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.

Jack Flader

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. "

Sydney Harbour Foreshore Authority

This doesn't compare with the scale of Donald Tsang/Tung Chee Wah's Cyberport deal with Richard Li.

"Andrew Kelly, the second-most senior official at the Sydney Harbour Foreshore Authority."

Nice work if you can get it...

After he left in April 2008, Mr Kelly took up a full-time job in the Middle East with a Kazal-associated company, earning between $200,000 and $385,000 tax-free;"

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.