More Fu Ji fraud

The likely scenario being management set up parallel operations and diverting business to them. Disclosure was non-existent. With the number of staff exiting (78%) it must have degenerated into a open joke on the bond and stock holders.

The lesson to be learned here is to shoot first and ask questions later when it comes to mainland China companies. Red flag here was the accounts were not released because CFO was too 'ill'.

A Director (Carlye Tsui) left because she said she couldn't get enough information, but this was at a much much later stage.

What is the heroic SFC doing? .. Sh*t F*ckall Competence

The Fu Ji auditors: CCIF CPA

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In that statement, Fu Ji said its business was stable and it was confident of increasing its share of the mainland catering market, which it said was growing fast. It called its financial position "solid" and stated profit attributable to shareholders of 250.23 million yuan (HK$284.57 million) for the six-month period.

In the past 12 months, according to a report prepared for Fu Ji's bondholders by accounting firm KPMG and reviewed by this newspaper, the beleaguered caterer has lost its contract to serve food to Intel, its largest corporate client, as well as contracts with Wal-Mart and Taiwanese computer manufacturer Asus. Fu Ji has just 3,000 staff, down from 13,823 in September last year, the report adds.

Fu Ji has also been losing senior staff. The caterer's heads of sales, legal services, human resources, investment and convenience foods resigned in the past year, the report says. Of 15 sales managers who worked for the company a year ago, 14 were gone, KPMG said, while 12 of 19 finance staff also left. The report says mainland courts hearing unspecified cases against Fu Ji have frozen some of the caterer's assets, meaning it cannot sell them.

The report left bondholders fuming. "There is a huge issue here with disclosure. We had no idea any of these problems were happening," one complained.

The SFC declined to comment.

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Voluntary liquidations. Norstar

Appears that Fu Ji and First Natural aren't the first, but is a start of a trent of net nets going for liquidation and wiping out shareholders. The management seem to escape not just unscathed but with most of the booty.

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Norstar chairman Lilly Huang convinced the High Court to put the firm into provisional liquidation. Norstar had made a wrong-way bet on accumulators and owed 39 million yuan on that contract. It had also been sued by a supplier for 326 million yuan.

However, according to Webb, the company should have had 753 million yuan of spare cash after these liabilities.

Lai has the same court-appointed role at Norstar. Deloitte is now selling the car-parts firm to state-owned Beijing West, which is connected to Norstar's management.

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HK Free market quotes

HKEx has introduced a new information service whereby real-time basic securities market prices are made generally available on designated websites free of charge to the public (the  Free Prices Website Service ). It is additional to the many market data services currently provided by HKEx-licensed information vendors and aims to meet the basic needs of investors for simple pricing information satisfied at present most probably by free delayed market data.

Fu Ji Food (1175) liquidates voluntarily

Has more assets ($3b) than liabilities ($2.2b) but the only ones emerging ahead in this mess will be the managers.

As typical of mainland companies.

Poor management with ulterior motives:

• An official at Fu Ji's headquarters in Shanghai said: "We think the game of financing is too complicated for us. We just want to quit it by liquidation."
• company was short of cash and had lost many middle managers, who had left to set up operations that compete with Fu Ji's businesses.

Bond holders are Fxked as they have no way of recovering a good proportion of assets as the company would have already been stripped. Bonds are trading at a 75% discount which means stock holders will get nothing but an expensive lesson:

Insolvency: who gets what in Hong Kong

1. Employees
2. Lenders with a claim on the company's assets, such as mortgages on properties
3. Unsecured creditors, usually banks and bondholders
4. Shareholders

A real clue to the shenanigans happening was the resignation of a Director who actually said something useful:

"Carlye Tsui Wai-ling, chief executive of the Hong Kong Institute of Directors, resigned as an independent director of Fu Ji last month. In her letter of resignation, she expressed concern that she could not get information from the company in a timely manner, and cited its delay in issuing its annual results last year"

This is a similar situation to First Natural Foods (1076) voluntary liquidation.

HK/China police border fades

Extradition procedure - stick them on a Sampan and point it North.

"June 4 student leader Zhou Yongjun tried to enter Hong Kong in late September 2008, but he was taken by Hong Kong police to the mainland authorities without any legal procedures.

HK Real estate shenanigans

Available for a lucky buyer: HK$357m: 39 Conduit Road, West Mid-Levels

Developer: Henderson Land Development (0012)

"The developer says the apartment is on the 66th floor, but the building is only 40 storeys high."

"So just what floor is the semiduplex in question actually on? "I can't tell you the answer to that, but we will tell the buyer the unit is on the 66th floor. Our top unit will be on the 88th floor, and the second-highest floor will be the 68th floor," the spokesman said."

GP Nano from IPO to flames in 2 ears

Criminal charges.. where?

Ban on directorships for two former GP Nano executives

The former chairman of defunct GP Nano Technology Group, Fung Chiu, and former executive director Lian En-sheng were banned by the High Court yesterday from being directors of any company for seven and six years respectively. The pair were accused by the Securities and Futures Commission of giving misleading information about transactions involving GP Nano. The company listed in July 2001, but its shares were suspended from trading two years later. It was eventually delisted in June 2005 and wound up three months later. Enoch Yiu