News

Ex-CSRC head under investigationCCDI notice
RTHK, 20-May-2019
He was formerly head of Agricultural Bank of China Ltd (1288).
Catherine Leung Kar Cheung, ex-J.P. Morgan MD, charged with bribing chairman of logistics company for IPOSponsorships of J.P. Morgan
ICAC, 16-May-2019
The first HK charge in the famous "Sons & Daughters" program of J,P. Morgan. We don't know which company, chairman or son was involved or whether JPM got the job. A list of their IPOs is at the link above. Ms Leung is now MD of hedge fund manager Serica Partners Asia Ltd, of which her husband Ivan Lee Chin Leung is founder and CIO.
Concentration warning in Kenford (0464)
SFC, 16-May-2019
The top 20 holders have 95.46% of the stock.
Roy Cho Kwai Chee charged with conspiracy to defraud Convoy (1019)SFC announcement
ICAC, 16-May-2019
2 years and 1 day after we published the "Enigma Network" report, the first charge is brought, relating to a relatively small and previously-unannounced acquisition by Convoy. 55% of the target was owned by Mr Cho. The ICAC alleges that he owned "50% shareholdings" in Convoy. He was not a disclosed shareholder, so to prove this, they will need to show that he was pulling the strings of numerous listed companies in the network which held the stock. Two co-conspirators are unnamed. We wait to see the rest of the iceberg.
Andrew Fan, Universal INED
Webb-site.com, 15-May-2019
A quick look at tomorrow's new listing sees an INED taking his 10th board seat. In our view, he should have found time to check his prospectus biography more carefully.
The spectacular implosion of Dr. Cho's 'nefarious network'The Enigma Network
Bloomberg, 15-May-2019
Today is the 2nd anniversary of Webb-site's publication of the Enigma Network. So far, nobody has been charged with any offence, and no SFC action has been taken to bring in the liquidators to wind up any of the listed companies involved.
Censure of GT (0263) and certain directorsThe Joint Global implosion
SEHK, 14-May-2019
This relates to our investigative report "The Joint Global implosion" of 30-Sep-2016. The announcement states that the Listing Department began investigating in mid-Oct-2016. In our view, the SFC and possibly the Commercial Crime Bureau should be investigating the circumstances of the collapse of Joint Global, which wiped over HK$2bn off the balance sheets of at least 11 listed companies in what we call the "Chung Nam Network".
HKICPA bans Richard Yin Yingneng for 2 years
HKICPA, 2-May-2019
Amazingly, it was only 18 months after the SFC's announcement of the Court's findings that the HKICPA "became aware" of the wrong-doing by its members, including Kenny Lee Yiu Sun. There appears to be some sort of communications failure between the 2 regulators.
Stop the Scripless U-turn
Webb-site.com, 30-Apr-2019
Investors were in the dark for 4 years about plans to tear up a model that was first recommended by the Hay Davison Report in 1988, has worked in Australia since 1999, and was legislated in HK in 2015 but never actioned. Our extensive discussions with SFC and HKEX reveal no legitimate issues. We urge legislators to reject this U-turn and the SFC to proceed with the legislated model. The stench of vested interests is overpowering.
Win Win Way (0994) flaunts connections of new directors
Company announcement, 26-Apr-2019
At least they are open about the fact that Ms Du Yi is the daughter of Du Zhongyuan, "one of the renowned revolutionary martyrs" and Ms Yip Man Shan (aka Ye Wenshan) is the daughter of Ye Jianying (ex-Marshal of the PLA and Chairman of the NPC Standing Committee).
Putting the dot back in HK
Webb-site.com, 25-Apr-2019
A deep dive into HK's "not-for-profit" internet domain registry reveals appalling governance, over-charging, continuing conflicts of interests and a severe case of corporate obesity. In late 2015, having hoarded enough cash to run the registry for 9 years, the Government-controlled board reversed a fee cut, losing a quarter of registered domains over the next 3 years, while seeking ways to squander the surpluses on mission-creep rather than return the cash to users. There is a better way.
HKICPA bans Wong Suet Fan for 1 year
HKICPA, 25-Apr-2019
She failed to respond to a Practice Review and failed to respond to the disciplinary case too. If you've seen her, give them a call.
Chunli Medical (1858) tries to justify taxed bonus issue
Company announcement, 23-Apr-2019
This follows a Webb-site complaint to HKEX on 21-Feb-2019. It is against shareholders' interests to send them bonus shares when that triggers a tax on the CNY1 par value of the new shares. The tax is deducted from a cash dividend, costing H-share owners RMB0.1. For domestic owners it is RMB0.2, which, with tax on the dividend, is more than the dividend, so they get no net dividend and owe the company money which it now asks them to pay!
Patrick Wong Ka Yan v Nicole Cheung Ka Yu (fka Cheung Lee Hung)Judgment in FCMP 121/2017
HK Court of First Instance, 23-Apr-2019
Man v ex-mistress, whom he met when she was a masseuse. He wants back the Wanchai flat he gave/lent her which was "near to his office in order to facilitate his visits to her". She claims her son is his. In separate proceedings (FCMP 121/2017), he is contesting the jurisdiction of the court to compel him to take a DNA test. Update: in the separate proceedings, he was ordered to take a DNA test.
SFC fines Nine Masts Capital Ltd HK$1.2m over naked short sellingLogo
SFC, 18-Apr-2019
For accidentally shorting shares they had not yet received in a placing, for the second time. We see the company logo is a boat with 3 sets of sails, so they are short-sailing 6 masts too.
Wu Yinong resigns as INED of Jiu Rong (2358) following his SFC sanction
Company announcement, 17-Apr-2019
This comes 3 days after Webb-site complained to HKEX that the company had failed to announce that Mr Wu had been sanctioned by the SFC for his due diligence failures while sponsoring an IPO at China Merchants Securities. The sanction was announced by the SFC on 27-Feb-2019, 7 weeks before. The question is, why do we have to point these things out to HKEX?

Our stories

Andrew Fan, Universal INED
A quick look at tomorrow's new listing sees an INED taking his 10th board seat. In our view, he should have found time to check his prospectus biography more carefully. (15-May-2019)
Stop the Scripless U-turn
Investors were in the dark for 4 years about plans to tear up a model that was first recommended by the Hay Davison Report in 1988, has worked in Australia since 1999, and was legislated in HK in 2015 but never actioned. Our extensive discussions with SFC and HKEX reveal no legitimate issues. We urge legislators to reject this U-turn and the SFC to proceed with the legislated model. The stench of vested interests is overpowering. (30-Apr-2019)
Putting the dot back in HK
A deep dive into HK's "not-for-profit" internet domain registry reveals appalling governance, over-charging, continuing conflicts of interests and a severe case of corporate obesity. In late 2015, having hoarded enough cash to run the registry for 9 years, the Government-controlled board reversed a fee cut, losing a quarter of registered domains over the next 3 years, while seeking ways to squander the surpluses on mission-creep rather than return the cash to users. There is a better way. (25-Apr-2019)
SFC action is too little, too late for minority shareholders of Luxey (8041)
The SFC seeks disqualification of 2 ex-directors, but fails to seek any recovery of Luxey's HK$350m, 7-fold overpayment in an acquisition from an alleged nominee of then Chairman Joseph Lau. We first documented this case and numerous other suspicious transactions involving Luxey and other listed companies in a series of articles in 2012. This is the only one to see any action, and it falls far short of what is needed to provide a deterrent. (14-Apr-2019)
Hopewell and the lemon discount
What does the ability to take a company private for 57 cents on the dollar say about the future of HK's public market? Failure to reform HK's laws and regulations to improve the corporate governance framwork will see the market shrink over time as good companies stay away and controllers take existing companies private. (22-Mar-2019)
Inside the Kingdee bubble
It appears to be a Shenzhen success story, conquering the World with the "Chinese management model", but we burn through the techno-fog of the disclosures and dig deep inside the accounts. You won't like what you see. (18-Mar-2019)
Revealed: SFC probes Chairman, CEO of Hua Han Health (0587), freezes their accounts
The SFC has frozen accounts at 3 brokerages up to HK$3.81bn, the amount raised by HHH in 2015 in an open offer ($3.19bn) and a CB ($0.62bn) issued to Huarong (2799) and CCB (0939). The SFC suspects false or misleading statements and misappropriation of part of the proceeds. (16-Feb-2019)
A simpler, fairer tax system
There are calls for a rental deduction for HK salaries tax, to compensate for the mortgage interest deduction. Both miss the point. Governments should not use tax breaks to distort consumer choice. Give people unconditional higher personal allowances instead, and introduce a flat rate of tax above that. Also, abolish the tiered rate of profits tax and the R&D deduction, 2 gimmicks introduced by Carrie Lam. (30-Jan-2019)
Why stock-plunges happen so often in HK
We explain the 20-year history to a statutory loophole which keeps investors in the dark on share pledges. (24-Jan-2019)
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)

Other news

Ex-CSRC head under investigationCCDI notice
RTHK, 20-May-2019
He was formerly head of Agricultural Bank of China Ltd (1288).
Catherine Leung Kar Cheung, ex-J.P. Morgan MD, charged with bribing chairman of logistics company for IPOSponsorships of J.P. Morgan
ICAC, 16-May-2019
The first HK charge in the famous "Sons & Daughters" program of J,P. Morgan. We don't know which company, chairman or son was involved or whether JPM got the job. A list of their IPOs is at the link above. Ms Leung is now MD of hedge fund manager Serica Partners Asia Ltd, of which her husband Ivan Lee Chin Leung is founder and CIO.
Concentration warning in Kenford (0464)
SFC, 16-May-2019
The top 20 holders have 95.46% of the stock.
Roy Cho Kwai Chee charged with conspiracy to defraud Convoy (1019)SFC announcement
ICAC, 16-May-2019
2 years and 1 day after we published the "Enigma Network" report, the first charge is brought, relating to a relatively small and previously-unannounced acquisition by Convoy. 55% of the target was owned by Mr Cho. The ICAC alleges that he owned "50% shareholdings" in Convoy. He was not a disclosed shareholder, so to prove this, they will need to show that he was pulling the strings of numerous listed companies in the network which held the stock. Two co-conspirators are unnamed. We wait to see the rest of the iceberg.
The spectacular implosion of Dr. Cho's 'nefarious network'The Enigma Network
Bloomberg, 15-May-2019
Today is the 2nd anniversary of Webb-site's publication of the Enigma Network. So far, nobody has been charged with any offence, and no SFC action has been taken to bring in the liquidators to wind up any of the listed companies involved.
Censure of GT (0263) and certain directorsThe Joint Global implosion
SEHK, 14-May-2019
This relates to our investigative report "The Joint Global implosion" of 30-Sep-2016. The announcement states that the Listing Department began investigating in mid-Oct-2016. In our view, the SFC and possibly the Commercial Crime Bureau should be investigating the circumstances of the collapse of Joint Global, which wiped over HK$2bn off the balance sheets of at least 11 listed companies in what we call the "Chung Nam Network".
HKICPA bans Richard Yin Yingneng for 2 years
HKICPA, 2-May-2019
Amazingly, it was only 18 months after the SFC's announcement of the Court's findings that the HKICPA "became aware" of the wrong-doing by its members, including Kenny Lee Yiu Sun. There appears to be some sort of communications failure between the 2 regulators.
Win Win Way (0994) flaunts connections of new directors
Company announcement, 26-Apr-2019
At least they are open about the fact that Ms Du Yi is the daughter of Du Zhongyuan, "one of the renowned revolutionary martyrs" and Ms Yip Man Shan (aka Ye Wenshan) is the daughter of Ye Jianying (ex-Marshal of the PLA and Chairman of the NPC Standing Committee).
HKICPA bans Wong Suet Fan for 1 year
HKICPA, 25-Apr-2019
She failed to respond to a Practice Review and failed to respond to the disciplinary case too. If you've seen her, give them a call.
Chunli Medical (1858) tries to justify taxed bonus issue
Company announcement, 23-Apr-2019
This follows a Webb-site complaint to HKEX on 21-Feb-2019. It is against shareholders' interests to send them bonus shares when that triggers a tax on the CNY1 par value of the new shares. The tax is deducted from a cash dividend, costing H-share owners RMB0.1. For domestic owners it is RMB0.2, which, with tax on the dividend, is more than the dividend, so they get no net dividend and owe the company money which it now asks them to pay!
Previously on Webb-site.com
Check out our full list of articles in the archive, since our launch in 1998.

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