Day: September 27, 2015

Bubbles and troubles in Hong Kong: Ongoing abusive “open offers” and placings making out in multi-billion-dollar bubbles. David Webb calls on regulators and rule-makers to take action. Hong Kong deserves better if it wishes to make a claim to be a world-class financial centre

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http://webb-site.com/articles/trouble2015.asp

Bubbles and troubles in Hong Kong
24th September 2015

As readers may recall, last year, Lerado Group (Holding) Co Ltd (Lerado, 1225) announced the proposed sale of its core business of baby strollers and infant car seats to Canadian listed firm Dorel Industries Inc (Dorel) for HK$930m. Lerado was planning to squat on most of the cash proceeds and only pay out $0.30 per share, or $228m. For this reason, we opposed the sale, because of concern that Lerado would become a cash shell trading at a discount to its net asset value. Your editor, David Webb, is a disclosed substantial shareholder currently holding over 8%. However, the sale was approved by shareholders on 16-Sep-2014 and completed on 31-Oct-2014.

Our concerns have now proven justified, culminating in current egregious proposals not just by Lerado but by other listed companies. We hope to stop them, if the regulators will require certain parties to play fairer. This article is long and complicated, and we thought about breaking it into pieces, but the picture becomes clearer if you assemble the whole jigsaw, so here it is. Apart from Lerado, this article covers transactions by numerous other listed companies in which you may have an interest, and several billion US dollars of bubbles. Continue reading →

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Hao Wen, Capital VC and Unity; questionable cash investments at extremely high valuations which link together 3 listed companies. David Webb urge the SFC’s corporate misconduct team to investigate

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http://webb-site.com/articles/trouble2015.asp

Hao Wen, Capital VC and Unity
24th September 2015

Browsing through documents for a much longer forthcoming story, we came across two highly questionable acquisitions that link together 3 listed companies: Hao Wen Holdings Ltd (Hao Wen, 8019) and two Chapter 21 investment companies, Capital VC Ltd (Capital VC, 2324) and Unity Investments Holdings Ltd (Unity, 0913) that we have warned investors about in the past. Continue reading →

Aim’s Chinese disasters offer cautionary tale for chancellor

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http://www.ft.com/intl/cms/s/0/a4b710f2-61f8-11e5-9846-de406ccb37f2.html#axzz3mfuQLSl6

September 23, 2015 11:24 pm

Aim’s Chinese disasters offer cautionary tale for chancellor

Kate Burgess

If the UK Chancellor wants a cautionary tale for his initiative to link London and Chinese stock markets, he should look to the Alternative Investment Market.

This week two of the 45 China-­based companies quoted on London’s junior market have either had their operations suspended or their shares. They are just the latest of a long string of Chinese disasters on Aim. Continue reading →

Police in Taiwan are investigating the whereabouts of the chairman of a listed company on bail awaiting trial in Hong Kong for fraud, after reports he was abducted in New Taipei City; Missing chairman sees Pearl Oriental shares plunge 15pc

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Hong Kong fraud accused feared abducted in Taipei
Samuel Chan
25 September 2015
Police in Taiwan are investigating the whereabouts of the chairman of a listed company on bail awaiting trial in Hong Kong for fraud, after reports he was abducted in New Taipei City on Sunday.

Wong Yuk-kwan, 68, who is also known as Wong Kun, is accused of defrauding the Securities and Futures Commission in a US oil field transaction. Continue reading →

CFOs see earnings shenanigans in 20% of U.S. public firms

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http://business.financialpost.com/executive/cfo/cfos-see-earnings-shenanigans-in-20-of-u-s-public-firms

CFOs see earnings shenanigans in 20% of U.S. public firms

James Saft, Reuters | September 25, 2015 2:06 PM ET

If you think the fact that a U.S. company’s earnings conform to accepted standards means they are to be trusted, then allow me to introduce you to the 20 per cent of chief financial officers who disagree. Continue reading →

A February takeover bid for Barnes & Noble that sent the bookseller’s stock soaring was fraudulent because the firm behind the announcement lacked funding to do the deal, the SEC said

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SEC alleges fraud in failed takeover bid of Barnes & Noble
Kevin McCoy
25 September 2015
A February takeover bid for Barnes & Noble that sent the bookseller’s stock soaring was fraudulent because the firm behind the announcement lacked funding to do the deal, the Securities and Exchange Commission said Thursday. Continue reading →

Fanya Exchange’s 36 billion yuan default ‘tip of iceberg’ in China; China investors in rare protest accuse regulators of “ignoring fraud”

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http://www.scmp.com/print/news/china/economy/article/1861179/fanya-exchanges-36-billion-yuan-default-tip-iceberg-china

http://www.scmp.com/print/news/china/money-wealth/article/1861178/failed-china-financial-products-drew-investors-their-low

Fanya Exchange’s 36 billion yuan default ‘tip of iceberg’ in China

PUBLISHED : Friday, 25 September, 2015, 12:00am

Xie Yu yu.xie@scmp.com

Exchanges featuring products from garlic to rhodium are under scrutiny after Fanya metals case

Rhodium and steel to garlic and onion, you name it, they trade it. Hundreds of these so-called commodity exchanges, which have mushroomed across the mainland in a regulatory void and attracted 1 trillion yuan in investments, are now under the microscope. Continue reading →

Oligarchs and Orchestras: Inside Luxembourg’s Secretive Low-Tax ‘Fortress of Art’ Warehouse; Fraud allegations against Swiss entrepreneur Yves Bouvier, have cast a shadow on Luxembourg’s and Singapore’s Le Freeport, a high-security, low-tax warehouse for art

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Oligarchs and Orchestras: Inside Luxembourg’s Secretive Low-Tax ‘Fortress of Art’ Warehouse; Fraud allegations against Swiss entrepreneur Yves Bouvier have cast a shadow on Luxembourg’s Le Freeport, a high-security, low-tax warehouse for art
By John Letzing And Max Colchester
24 September 2015
SENNINGERBERG, Luxembourg—Last year, David Arendt stood in a reinforced concrete warehouse at Luxembourg’s airport and welcomed wealthy collectors to his “fortress of art,” complete with high security, minimal taxes and discretion. Mr. Arendt warned that it would fill up quickly. Continue reading →

Sebi may impose floor price for stock splits to curb market manipulation

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Sebi may impose floor price for stock splits

JAYSHREE P UPADHYAY Mumbai

25 September 2015

Business Standard

The Securities and Exchange Board of India (Sebi) is likely to set a floor price for companies to qualify for stock splits in order to curb market manipulation. One of the proposals allows splits only in stocks priced above ~500 consistently for the previous six months. In a stock split, a company divides its existing shares and although the number of shares increases, their total value remains intact. Continue reading →

Stash: SEBI to look into illicit arbitrage

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Stash: SEBI to look into illicit arbitrage
21 September 2015
Widening its probe into suspected tax evasion and laundering of black money through stock markets, regulator Sebi is looking into illicit ‘arbitrage’ through derivatives trading from offshore locations. Also under the scanner are manipulation through ‘client code modifications’ in the past, although there has been a complete clampdown on this route for the past couple of years.

The Securities and Exchange Board of India (Sebi) was so far focusing on trades during the fiscals 2013-14 and 2014-15 in its fight against misuse of stock market platform for tax evasion and laundering of illicit funds. Continue reading →