News

Jiayuan (2768) Chairman should expect the SFC's call
Webb-site.com, 23-Jan-2019
After denying any knowledge of reasons for last Thursday's crash, Jiayuan now says that 3.73% of the Chairman's stake was dumped in a forced sale due to enforcement of share charges and/or margin financings.
China prosecutors order arrest of 4 ex-executives at Huarong for bribery
Reuters, 22-Jan-2019
Webb-site notes that 2 of them, Bai Tianhui and Guo Jintong, were successively chairmen at Asia Pacific Silk Road Investment Co Ltd (0767) between 7-Sep-2017 and 10-Jul-2018, with Guo taking over from Bai on 2-Feb-2018. The firm is a P2P lending business and is 55% owned by Huarong Financial Services Asset Management L.P., although there is a huge mandatory convertible note held by the person who sold that business to ASPR.
China First Capital (1269): part 2
Webb-site.com, 13-Jan-2019
We continue our investigation into the UK joint venture, following a "clarification" announcement late on Christmas Eve.
Last chance to satirise the anthem
Webb-site.com, 10-Jan-2019
In case you've lost that lovin' feelin' for the Chinese markets.
SFC prohibits brokers' client from placing orders for derivative warrants
SFC, 4-Jan-2019
The SFC sketches allegations that a trader bought warrants, then bid up the underlying stock, then sold warrants, then sold the stock, and somehow made a profit repeating this pattern despite the often-wide spreads in DWs. In our view a binding order can never be false, and the SFC should not encourage the fallacy that bids and offers in the market should provide a predictive price signal to investors. They are no more than bids and offers capable of being executed. The investigation continues - but aren't there better things on which to spend limited enforcement resources?
SFC fines Ardon Maroon Fund Management (HK) Ltd HK$800k for wash trade
SFC, 27-Dec-2018
The SFC says that but for the firm's financial position, the fine would have been heavier. So they weren't too hard on Ardon. The firm is now named China Silver Asset Management (HK) Ltd.
Court orders boiler room fraudsters to compensate investors
SFC, 24-Dec-2018
It doesn't actually know who the human fraudsters are, but it's got their corporate bank accounts, containing HK$600k, which will now be distributed to 14 victims pro rata to the amounts they sent in.
Kenneth Yeung Bing Kwong v Mount Oscar LtdCalifornia action
HK Court of First Instance, 24-Dec-2018
War has apparently broken out in the Yeung family, which controls jewellers King Fook (0280) via Yeung Chi Shing Estates Ltd. Kenneth Yeung unsuccessfully challenges his removal as director of a subsidiary of YCSEL, Mount Oscar Ltd. He has launched a separate action in California against various relatives and companies.
CST (0985) lends HK$200m to someone
Company announcement, 21-Dec-2018
It fails to say whom. The loan amount is 22.5% of CST's market capitalisation.
Trio charged with fraud and forgery over HOS flat purchase
ICAC, 20-Dec-2018
A married couple allegedly understated their combined income by using a fake job for the wife from the 3rd defendant, thereby qualifying for the Government's discounted home ownership scheme.
Man charged with HK$680k conspiracy to bribe HKJC members
ICAC, 19-Dec-2018
Comment: It's been a while since the last one, but with only 200 Voting Members able to nominate new members of the Club, and the incorrect presumption of respectability that membership buys, the system invites corruption. The Club should just sell the available memberships by regular sealed tender and stop trying to act as arbiters of probity.
SFC takes CMBC Capital (1141) and 6 former directors to MMTThe bubbles in CNN
SFC, 18-Dec-2018
This alleges late disclosure of market gains in its securities portfolio in 2014, including shares of Icube (0139), Heritage (0412) and Rising Development (1004), all of which have since been renamed. All 4 companies were then in what we call the "Chung Nam Network". On 8-Jan-2015, we warned the market about bubbles in 2 of them.
Brexit and customs from a HK perspective
Webb-site.com, 17-Dec-2018
Theresa May has pursued 2 conflicting objectives: leaving the customs union; and keeping the UK/EU customs border open. HK people are used to a customs boundary with the rest of China, with no impact on sovereignty. Similarly, Northern Ireland should choose between remaining in the EU customs union post-Brexit with a boundary down the Irish Sea, or leaving the EU customs union and having a hard border with the Republic of Ireland. Only then can the UK or GB have independence in trade negotiations with other countries and deliver a proper Brexit.
Statement on Leung Chun Ying, Holden Chow Ho Ding & UGL
ICAC, 12-Dec-2018
Apparently the ICAC Operations Review Committee was able to receive a report from the ICAC and legal advice from the DoJ and endorse it all within one day.
Criticism of Chen Xing Development (2286) and censure of 4 EDs
SEHK, 12-Dec-2018
A year after listing, the Shanxi property developer started sinking cash into "wealth-management products" without disclosure or shareholders' approval.
China Huarong (2799): Party like it's 1949
Company announcement, 10-Dec-2018
"The Party Committee shall play the core leadership role...The chairman of the board of directors shall concurrently serve as the secretary of the Party Committee". Good to see the ongoing deepening of market reforms and opening up!

Our stories

Jiayuan (2768) Chairman should expect the SFC's call
After denying any knowledge of reasons for last Thursday's crash, Jiayuan now says that 3.73% of the Chairman's stake was dumped in a forced sale due to enforcement of share charges and/or margin financings. (23-Jan-2019)
Last chance to satirise the anthem
In case you've lost that lovin' feelin' for the Chinese markets. (10-Jan-2019)
Brexit and customs from a HK perspective
Theresa May has pursued 2 conflicting objectives: leaving the customs union; and keeping the UK/EU customs border open. HK people are used to a customs boundary with the rest of China, with no impact on sovereignty. Similarly, Northern Ireland should choose between remaining in the EU customs union post-Brexit with a boundary down the Irish Sea, or leaving the EU customs union and having a hard border with the Republic of Ireland. Only then can the UK or GB have independence in trade negotiations with other countries and deliver a proper Brexit. (17-Dec-2018)
Companies Registry illegally overcharged users HK$3.6bn
The CFA has ruled that Trading Funds must not seek distributable profit or pay "notional tax". Webb-site finds that the Companies Registry has overcharged users HK$3.6bn since 1998, making up to a 94% return on fixed assets against a target 5.7%. The illegal excess should now be returned by waiving fees, including scrapping the Great Paywall of HK on corporate information. It should not take another judicial review to do so. (19-Nov-2018)
41 endangered stocks
If HKEX proceeds with an ill-conceived Listing Rule change, companies with disclaimed audit reports for 2019 will be suspended and likely delisted, victimising minority shareholders. We now list those with disclaimed audits up to 30-Jun-2018 which would be affected if the rule applied today. Make your submission to stop this nonsense! (17-Nov-2018)
Freedom and the future of China
This is the text of a High Table dinner speech delivered by Webb-site founder David Webb to the students of Chi Sun College, University of Hong Kong, this evening. Hyperlinks have been added. (30-Oct-2018)
The Huarong-CMB network: 26 stocks not to own
In our first circuit diagram since the infamous Enigma Network, we examine the overlapping networks, bubbles and funding surrounding 26 HK-listed companies that your portfolio would probably do better without. (19-Oct-2018)
Huarong and China Singyes Solar Technologies (0750)
CSST, now suspended pending disclosure of its financial position, has failed to disclose in its reports the interest of Huarong Int Fin (0993), which claims to have a 15.09% interest, including 8.04% purchased from an unknown vendor in Dec-2017 and security over a further 7.05% pledged to it, presumably to secure a put option that it claims to have been granted. By whom? (18-Oct-2018)
The Princeton economist and a plot in Sheung Wan
A tiny plot of prime HK land left behind in a company dissolved in 1972 is now a potential windfall in a redevelopment of its surroundings. For 54 years, Professor Gregory Chow never knew he had a stake in it. (8-Oct-2018)
China First Capital (1269) and a questionable joint venture
Webb-site finds serious problems with CFC's statements about a GBP60m UK start-up joint venture with a BVI company, the owner of which is not disclosed, which has only partly paid for its share of the JV. (7-Oct-2018)

Other news

China prosecutors order arrest of 4 ex-executives at Huarong for bribery
Reuters, 22-Jan-2019
Webb-site notes that 2 of them, Bai Tianhui and Guo Jintong, were successively chairmen at Asia Pacific Silk Road Investment Co Ltd (0767) between 7-Sep-2017 and 10-Jul-2018, with Guo taking over from Bai on 2-Feb-2018. The firm is a P2P lending business and is 55% owned by Huarong Financial Services Asset Management L.P., although there is a huge mandatory convertible note held by the person who sold that business to ASPR.
SFC prohibits brokers' client from placing orders for derivative warrants
SFC, 4-Jan-2019
The SFC sketches allegations that a trader bought warrants, then bid up the underlying stock, then sold warrants, then sold the stock, and somehow made a profit repeating this pattern despite the often-wide spreads in DWs. In our view a binding order can never be false, and the SFC should not encourage the fallacy that bids and offers in the market should provide a predictive price signal to investors. They are no more than bids and offers capable of being executed. The investigation continues - but aren't there better things on which to spend limited enforcement resources?
SFC fines Ardon Maroon Fund Management (HK) Ltd HK$800k for wash trade
SFC, 27-Dec-2018
The SFC says that but for the firm's financial position, the fine would have been heavier. So they weren't too hard on Ardon. The firm is now named China Silver Asset Management (HK) Ltd.
Court orders boiler room fraudsters to compensate investors
SFC, 24-Dec-2018
It doesn't actually know who the human fraudsters are, but it's got their corporate bank accounts, containing HK$600k, which will now be distributed to 14 victims pro rata to the amounts they sent in.
Kenneth Yeung Bing Kwong v Mount Oscar LtdCalifornia action
HK Court of First Instance, 24-Dec-2018
War has apparently broken out in the Yeung family, which controls jewellers King Fook (0280) via Yeung Chi Shing Estates Ltd. Kenneth Yeung unsuccessfully challenges his removal as director of a subsidiary of YCSEL, Mount Oscar Ltd. He has launched a separate action in California against various relatives and companies.
CST (0985) lends HK$200m to someone
Company announcement, 21-Dec-2018
It fails to say whom. The loan amount is 22.5% of CST's market capitalisation.
Trio charged with fraud and forgery over HOS flat purchase
ICAC, 20-Dec-2018
A married couple allegedly understated their combined income by using a fake job for the wife from the 3rd defendant, thereby qualifying for the Government's discounted home ownership scheme.
Man charged with HK$680k conspiracy to bribe HKJC members
ICAC, 19-Dec-2018
Comment: It's been a while since the last one, but with only 200 Voting Members able to nominate new members of the Club, and the incorrect presumption of respectability that membership buys, the system invites corruption. The Club should just sell the available memberships by regular sealed tender and stop trying to act as arbiters of probity.
SFC takes CMBC Capital (1141) and 6 former directors to MMTThe bubbles in CNN
SFC, 18-Dec-2018
This alleges late disclosure of market gains in its securities portfolio in 2014, including shares of Icube (0139), Heritage (0412) and Rising Development (1004), all of which have since been renamed. All 4 companies were then in what we call the "Chung Nam Network". On 8-Jan-2015, we warned the market about bubbles in 2 of them.
Previously on Webb-site.com
Check out our full list of articles in the archive, since our launch in 1998.

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