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.