News

SFC takes Tom Tang Chung Yen and Li Yik Shuen to MMT, alleges insider dealing
SFC, 16-Sep-2019
Mr Tang, brother of former HK Chief Secretary Henry Tang Ying Yen, is alleged to have tipped off Ms Li, with whom he was "in an intimate relationship", about the looming sale of the core business of Meadville Holdings Ltd, a Tang family company. She is alleged to have insider dealt in 2009. The SFC would normally have 6 years to bring a civil claim after it becomes aware of alleged wrong-doing, suggesting that it only uncovered this after Aug-2013.
Lose your marbles
Webb-site.com, 15-Sep-2019
Webb-site issues a bubble warning on marble miner ArtGo (3313), which is up 812% since the end of May and now trades at 24x estimated net tangible assets, making a HK$29bn bubble.
Avoid: S. Culture (1255)
Webb-site.com, 15-Sep-2019
Webb-site issues a bubble warning on this stock. The Chairman has pledged a majority shareholding to a lender. The loss-making firm is trading at 13 times its net tangible asset value and ownership may be highly concentrated.
Beijing berates Li Ka-shing over protest commentsCorporate voting
RTHK, 13-Sep-2019
Perhaps now he would give up his numerous corporate votes in the small-circle constituencies of the Election Committee and LegCo and support One Worker, One Vote for those seats instead? That would be an olive branch indeed. And it can all be done in local legislation, as we explained last week.
Chinese-medicine hospital plan moves forwardGovt PR
RTHK, 13-Sep-2019
If there were 30 seats on the HK Chief Executive Election Committee for astrologers or feng shui masters then they too would get their own Government building. It is downright dangerous to deflect calls for better public hospitals by promoting pseudo-science. Govt says qualified NGOs must have at least 10 years' experience providing and managing Chinese-medicine services - but no requirement to prove that it actually works.
Where can one protest if not near MTR stations?
Webb-site.com, 13-Sep-2019
Police have banned a protest march on HK Island on Sunday, partly because it goes near several MTR stations. Of course, the whole point of Mass Transit is to take people near urban areas. This image shows what a 500 metre no-protest zone around stations on the MTR Island line would look like.
Ventus Lau Wing Hong v Returning Officer for NT East and Gary Fan Kwok Wai
HK Court of First Instance, 13-Sep-2019
For the same reasons as in the case of Agnes Chow Ting, Mr Lau succeeds in his election petition. The Returning Officer didn't give him a chance to be heard before disqualifying his candidacy. Unless successfully appealed, Neo-Democrat Gary Fan Kwok Wai is unseated and there will be a by-election in NT East.
SFC bans Jacky Cheung Chiu Hung, ex-Hang Seng Bank, for 2 years
SFC, 12-Sep-2019
He made unauthorised transactions on a client's account and forged her signature to cover it.
Govt weighing up using emergency law: Teresa ChengThe ERO
RTHK, 11-Sep-2019
In constitutional terms, it's like weighing up whether to launch thermonuclear war. At least the Govt was going to ram the Extradition Bill through LegCo rather than just make laws on its own, destroying the separation of powers between the Executive and Legislative branches of Government. That's what the Emergency Regulations Ordinance can do, and more.
MTR videos are not Personal Data under PDPO
Webb-site.com, 10-Sep-2019
The MTRC and Police are hiding behind a "personal data" excuse for not releasing videos of the incident in Prince Edward Station on 31-Aug-2019. The law on this is clear: if the video doesn't name the subjects, then it isn't personal data. So said the Court of Appeal in 2000. HK badly needs a Freedom of Information law.
A curious addition to the Transport Constituency
Webb-site.com, 6-Sep-2019
After yesterday's ICAC allegations of vote-rigging in the I.T. sector, should the Taxi Drivers & Operators Association still be added to the list of Transport sector voters?
The most likely outcome for HK
Webb-site.com, 3-Sep-2019
A systemically unstable equilibrium of civil liberties without democracy may have irrevocably tipped towards an authoritarian outcome. We suggest a way to salvage the situation, but we consider the most likely outcome is now a crackdown. We look at what form that might take, the possible aftermath and the looming 2047 expiry of Basic Law promises.
Agnes Chow Ting v Returning Officer and Au Nok Hin
HK Court of First Instance, 2-Sep-2019
Mr Au's election is nullified because Ms Chow was not given the right to be heard before the Returning Officer disqualified her on the ground that, although she signed the required declaration that she would uphold the Basic Law, the RO didn't believe her. If the judgment is not successfully appealed then there will be a by-election on HK Island. The Court maintains that the Returning Officer must still filter candidates by second-guessing their declaration, following the NPCSC interpretation of 7-Nov-2016.
Amid crisis, China rejected HK plan to appease protesters - sources
Reuters, 30-Aug-2019
Comment: this confirms that although CE Carrie Lam has constitutional autonomy to administer HK, repsond to protesters' demands and withdraw bills from the legislature, she is following Peking's directions. How lame, Mrs Lam. A "high degree of autonomy" is worthless unless you are prepared to exercise it.
SFC obtains injunctions, suspects pump & dump of Ching Lee (3728) in 2016
SFC, 27-Aug-2019
The stock subsequently moved from GEM to the Main Board on 18-Sep-2017. The alleged manipulative scheme was planned and commenced before the listing on 29-Mar-2016 and lasted until the bubble burst on 7-Sep-2016. We note that the listing was sponsored by Kingsway Capital Ltd and the joint bookrunner was SBI China Capital Financial Services Ltd. As announced upon listing, the top 5 placees had 82.50% and the top 10 had 98.83% of the placing.
Chen Hsong (0057): majority shareholder votes Chiang Chi Kin, brother of Chairman, off the board at AGM
Company announcement, 22-Aug-2019
The announcement fails to state whether there is any disagreement between Mr Chiang and other directors and/or other matters to be brought to shareholders' attention. At the time of the annual report, he and his sister Chiang Lai Yuen (Chairman) were directors of the majority shareholder, Chen Hsong Investment Ltd, which is 100% held by Chiangs' Industrial Holdings Ltd, of which Ms Chiang was a director. In turn, this is held by the trustee of the Chiang Chen Industrial Charity Foundation. The 2 siblings were among eligible beneficiaries of the trust via BVI companies that they own.
Chen Hsong (0057): co has no plan to consider any privatisation proposal, none has been put forward
Company announcement, 22-Aug-2019
At this afternoon's AGM, David Webb asked whether the company consulted the majority shareholder before making this statement. The answer was "no". So this statement does not rule out the possibility that the majority shareholder is considering putting forward a proposal to the board. The meeting was video-recorded (but not webcast) by the company with 4 cameras, so the media can ask them for a copy. It's a public company after all.
Webb on HK protests and China: a 1-hour podcast
Hidden Forces, 19-Aug-2019
Recorded at 9pm HKT on 16-Aug-2019, a wide-ranging discussion on the unsustainability of HK's model of civil liberties without democracy and the possible outcomes, as well as the unsustainability of the centrally-planned Chinese economic model.

Our stories

Lose your marbles
Webb-site issues a bubble warning on marble miner ArtGo (3313), which is up 812% since the end of May and now trades at 24x estimated net tangible assets, making a HK$29bn bubble. (15-Sep-2019)
Avoid: S. Culture (1255)
Webb-site issues a bubble warning on this stock. The Chairman has pledged a majority shareholding to a lender. The loss-making firm is trading at 13 times its net tangible asset value and ownership may be highly concentrated. (15-Sep-2019)
Where can one protest if not near MTR stations?
Police have banned a protest march on HK Island on Sunday, partly because it goes near several MTR stations. Of course, the whole point of Mass Transit is to take people near urban areas. This image shows what a 500 metre no-protest zone around stations on the MTR Island line would look like. (13-Sep-2019)
MTR videos are not Personal Data under PDPO
The MTRC and Police are hiding behind a "personal data" excuse for not releasing videos of the incident in Prince Edward Station on 31-Aug-2019. The law on this is clear: if the video doesn't name the subjects, then it isn't personal data. So said the Court of Appeal in 2000. HK badly needs a Freedom of Information law. (10-Sep-2019)
A curious addition to the Transport Constituency
After yesterday's ICAC allegations of vote-rigging in the I.T. sector, should the Taxi Drivers & Operators Association still be added to the list of Transport sector voters? (6-Sep-2019)
The most likely outcome for HK
A systemically unstable equilibrium of civil liberties without democracy may have irrevocably tipped towards an authoritarian outcome. We suggest a way to salvage the situation, but we consider the most likely outcome is now a crackdown. We look at what form that might take, the possible aftermath and the looming 2047 expiry of Basic Law promises. (3-Sep-2019)
Why Carrie Lam must go
The "suspension" of the Extradition Bill, which will likely lapse in July 2020, is not the end of an increasing erosion of HK's autonomy. With a rubber-stamp legislature, the only thing that now prevents draconian legislation is massive public pressure. Mrs Lam has irrevocably lost the public trust. Beijing will hold her accountable for the loss of control last week, after a suitable interval to disconnect the issues, but this will not prevent the increasing erosion of HK's autonomy. (16-Jun-2019)
The Trump Dump: war-gaming the next move against China
The US Administration has so far focused entirely on the trade account, but when the potential for tariffs is exhausted, if not sooner, Trump may start to wonder why US funds have hundreds of billions of dollars invested in stocks and bonds of Chinese state-backed companies, and use OFAC powers to order them to divest. (2-Jun-2019)
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)

Other news

SFC takes Tom Tang Chung Yen and Li Yik Shuen to MMT, alleges insider dealing
SFC, 16-Sep-2019
Mr Tang, brother of former HK Chief Secretary Henry Tang Ying Yen, is alleged to have tipped off Ms Li, with whom he was "in an intimate relationship", about the looming sale of the core business of Meadville Holdings Ltd, a Tang family company. She is alleged to have insider dealt in 2009. The SFC would normally have 6 years to bring a civil claim after it becomes aware of alleged wrong-doing, suggesting that it only uncovered this after Aug-2013.
Beijing berates Li Ka-shing over protest commentsCorporate voting
RTHK, 13-Sep-2019
Perhaps now he would give up his numerous corporate votes in the small-circle constituencies of the Election Committee and LegCo and support One Worker, One Vote for those seats instead? That would be an olive branch indeed. And it can all be done in local legislation, as we explained last week.
Chinese-medicine hospital plan moves forwardGovt PR
RTHK, 13-Sep-2019
If there were 30 seats on the HK Chief Executive Election Committee for astrologers or feng shui masters then they too would get their own Government building. It is downright dangerous to deflect calls for better public hospitals by promoting pseudo-science. Govt says qualified NGOs must have at least 10 years' experience providing and managing Chinese-medicine services - but no requirement to prove that it actually works.
Ventus Lau Wing Hong v Returning Officer for NT East and Gary Fan Kwok Wai
HK Court of First Instance, 13-Sep-2019
For the same reasons as in the case of Agnes Chow Ting, Mr Lau succeeds in his election petition. The Returning Officer didn't give him a chance to be heard before disqualifying his candidacy. Unless successfully appealed, Neo-Democrat Gary Fan Kwok Wai is unseated and there will be a by-election in NT East.
SFC bans Jacky Cheung Chiu Hung, ex-Hang Seng Bank, for 2 years
SFC, 12-Sep-2019
He made unauthorised transactions on a client's account and forged her signature to cover it.
Govt weighing up using emergency law: Teresa ChengThe ERO
RTHK, 11-Sep-2019
In constitutional terms, it's like weighing up whether to launch thermonuclear war. At least the Govt was going to ram the Extradition Bill through LegCo rather than just make laws on its own, destroying the separation of powers between the Executive and Legislative branches of Government. That's what the Emergency Regulations Ordinance can do, and more.
Agnes Chow Ting v Returning Officer and Au Nok Hin
HK Court of First Instance, 2-Sep-2019
Mr Au's election is nullified because Ms Chow was not given the right to be heard before the Returning Officer disqualified her on the ground that, although she signed the required declaration that she would uphold the Basic Law, the RO didn't believe her. If the judgment is not successfully appealed then there will be a by-election on HK Island. The Court maintains that the Returning Officer must still filter candidates by second-guessing their declaration, following the NPCSC interpretation of 7-Nov-2016.
Amid crisis, China rejected HK plan to appease protesters - sources
Reuters, 30-Aug-2019
Comment: this confirms that although CE Carrie Lam has constitutional autonomy to administer HK, repsond to protesters' demands and withdraw bills from the legislature, she is following Peking's directions. How lame, Mrs Lam. A "high degree of autonomy" is worthless unless you are prepared to exercise it.
SFC obtains injunctions, suspects pump & dump of Ching Lee (3728) in 2016
SFC, 27-Aug-2019
The stock subsequently moved from GEM to the Main Board on 18-Sep-2017. The alleged manipulative scheme was planned and commenced before the listing on 29-Mar-2016 and lasted until the bubble burst on 7-Sep-2016. We note that the listing was sponsored by Kingsway Capital Ltd and the joint bookrunner was SBI China Capital Financial Services Ltd. As announced upon listing, the top 5 placees had 82.50% and the top 10 had 98.83% of the placing.
Chen Hsong (0057): majority shareholder votes Chiang Chi Kin, brother of Chairman, off the board at AGM
Company announcement, 22-Aug-2019
The announcement fails to state whether there is any disagreement between Mr Chiang and other directors and/or other matters to be brought to shareholders' attention. At the time of the annual report, he and his sister Chiang Lai Yuen (Chairman) were directors of the majority shareholder, Chen Hsong Investment Ltd, which is 100% held by Chiangs' Industrial Holdings Ltd, of which Ms Chiang was a director. In turn, this is held by the trustee of the Chiang Chen Industrial Charity Foundation. The 2 siblings were among eligible beneficiaries of the trust via BVI companies that they own.
Previously on Webb-site.com
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