News

Ex-security guard jailed for being in 1 Country, 2 Systems simultaneously
ICAC, 19-Oct-2017
Mr Yim Yiu Chuen signed in to work in HK and then went off to the mainland on 60 occasions during his working hours. His successor Li Pak Ho is accused of doing a similar thing. They were supposed to be checking for unauthorised canines at public housing estates. Perhaps they went to see a man about a dog.
Ex-Funing Property Management Ltd manager charged over festive flowers
ICAC, 18-Oct-2017
The old kumquat racket. Have you ever wondered how those plants end up in your apartment lobby? Mr Wong Kin Wah allegedly faked documents to supply Chinese New Year flowers to Wylie Court, Ho Man Tin for HK$25k.
Fung Chuen v Sandmartin (0482)
HK Court of First Instance, 17-Oct-2017
The court grants inspection of documents relating to dubious deals by Sandmartin. Deputy Judge Alex Lee writes "I am satisfied that... a reasonable case for investigating whether the loans advanced to the two Nepalese Debtors were a pretext by the Company’s directors for siphoning off the Company’s funds to the detriment of its various stakeholders including the minority shareholders".
HKEX trading floor to close on 30th anniversary of Black Monday
South China Morning Post, 15-Oct-2017
Lovely timing. After the crash on 19-Oct-1987, the Council of the Stock Exchange closed it for 4 days - that was the last time it closed apart from weather, weekends and holidays. This time, it's closing for good.
China Evergrande (3333) top at giving away shareholders' money
South China Morning Post, 13-Oct-2017
The company donated RMB1,608m in 2016, or about 9.1% of net profit. It's difficult to see how such largesse can be consistent with the board's fiduciary duty to shareholders.
Proprietor guilty of HK$200k bribery over air-con piping works
ICAC, 12-Oct-2017
He inflated a quote and then kicked back $200k or about 25% of the original quote to the assistant project manager (unnamed) of an eningeering firm undertaking the renovation of Yau Oi Commercial Complex, Yau Oi Estate, Tuen Mun - one of Link REIT's properties. The complex is now known as H.A.N.D.S., or Have A Nice Day Shopping.
Inland Revenue v Right Margin Ltd
HK Court of First Instance, 12-Oct-2017
The Commissioner loses the appeal against the decision of the Inland Revenue Board of Review that allowed the appeal by the Chinachem subsidiary. The bad debt from a joint venture developer, Victory World Ltd, was tax-deductible.
Company director charged with HK$1m SME loan fraud
ICAC, 10-Oct-2017
He returns to HK after 9 years on the run, Half the loan was guaranteed by the Government's interventionist SME Loan Guarantee Scheme. Your dollars at work. The company was compulsorily wound up in 2011.
HKICPA fines Mr Lee Ping Kai HK$30k
HKICPA, 9-Oct-2017
Filling the blanks: Mr Lee is/was a director of Pan-China (H.K.) CPA Ltd, which did the audit of GT Group (0263) for 2014 and the interim review for 2015. HKICPA fails to name either of these. Webb-site filed a complaint against the auditor with the Financial Reporting Council in Dec-2015.
SFC directs suspension of New Ray Medicine (6108)Enigma Network
Company announcement, 6-Oct-2017
This was one of the 50 stocks not to own in our "Enigma Network" published on 15-May-2017.
TVB (0511) v Takeovers and Mergers Panel
HK Court of First Instance, 4-Oct-2017
Note: the word "waiver" is misspelt "wavier" 3 times in this judgment.
HKSAR v Christine Fong Kwok Shan
HK Court of Final Appeal, 4-Oct-2017
Ms Fong's appeal against conviction for demonstrating in a LegCo public gallery is unanimously dismissed. However, the court rejects the Government's submission that a person does not have freedom of expression when on Government property. Rather, it is for the Government to show that a restriction on free speech is justified in the circumstances on the grounds of constitutional necessity.
Criticism of CEEI (0986), Chen Tong (Chairman & CEO) and Xiang Liang (ED)
SEHK, 29-Sep-2017
CEEI is in what we call the "Enigma Network". When the investment in Luen Wong (8217) was announced, Webb-site called it a bubble stock trading on a P/B of 321 and a P/E of 861. CEEI said the deal was "fair and reasonable", "a good investment opportunity" and "an attractive investment which will provide satisfactory return". It subsequently crashed, of course. We pointed out the breach of the Listing Rules, for which the company and its directors have now been criticised by the Listing Committee. There was no criticism of the bullish statements made by the CEEI board about Luen Wong.
CCT Land (0261) shareholders veto share consolidation
Company announcement, 28-Sep-2017
Persons holding 28.11% of the company voted against, leaving the price stuck at $0.01 offered, no bid.
QT v Director of Immigration
HK Court of Appeal, 25-Sep-2017
In a landmark decision, the Court unanimously grants the appeal by a person in a same-sex British civil partnership, ruling that the policy indirectly discriminates against gay couples in a civil partnership or marriage recognised overseas, because it grants a benefit (a dependent visa) only to spouses as defined by HK law, of the opposite sex, for which they cannot qualify. There is no rational connection between the legitimate aim of immigration control and the means adopted. Our take: this very thorough and well-reasoned ruling will impact other policies which adopt heterosexual marriage as a criterion for benefits. The Government may try to go to the Court of Final Appeal, but they are unlikely to succeed in overturning this.

Our stories

One Board, One Regulator
We respond to HKEX's 2nd attempt to introduce 2nd-class shares via a "New Board", rather than cleaning up its existing boards and transferring listing regulation to the statutory regulator which oversees takeovers, the SFC. Coupled with recent moves to embed the Communist Party in the constitutions of state-controlled enterprises, HK and China risk a toxic combination of no votes for government and no votes for capital, leading to an emerging tycoon-Communist Party oligarchy. We propose a better approach. (7-Aug-2017)
Rebuilding free markets in HK
These slides are from a presentation by David Webb today, on how HK's free markets have eroded during the 20 years since the Handover, and what HK can do to recover its dynamism. (16-Jun-2017)
AAC (2018) announcement seems familiar
AAC, in a rather desperate move, has announced a "strategic cooperation agreement" with CITIC Bank. Where have we seen that before? (9-Jun-2017)
The Enigma Network: 50 stocks not to own
Sometimes, all you need to tell a story is a picture. (15-May-2017)
Holdings in Fullshare (0607) via Shanghai Connect
Nice work by Glaucus Research today in a thorough analysis of the bubble in Fullshare, which also relates to a bubble in Zall (2098) because of their cross-holdings. Webb-site called these bubbles on 5-Aug-2016, and this chart suggests that accumulation of Fullshare by persons on the Southbound train may have propped it up. (25-Apr-2017)
Spilt milk: net CCASS changes after sell-off in China Huishan Dairy (6863)
Trades in Friday morning's collapse were settled yesterday, 28-Mar. We see that mainland investors via Shanghai Connect bought a net 77.6m shares (0.58%), raising their stake to 7.32%, while the biggest net reduction came from Guoyuan Securities Brokerage (HK), 216m shares (1.60%). It's a fair bet that there was a margin call, but we wait for Chairman Yang to reveal all. (29-Mar-2017)
Press statement from WKCDA
Poor transparency: you won't find this on the WKCDA web site, so it's going on ours. We've added a link from the statement to the Procurement Procedures. (22-Feb-2017)
West Kowloon needs tender care
We urge the board of WKCDA, which was bypassed for months in the planning of the Palace Museum, to put the main architectural services contract out to tender, given that there is still no binding contract with Rocco Yim's company. Let him compete for the work, in line with HK's commitments to free and fair trade under WTO obligations. We estimate the contract size at HK$140m. (6-Feb-2017)
RIP Clare Hollingworth
She was born on the same day as the Republic of China and shipping tycoon Tung Chao Yung. She died today aged 105 years 3 months. (10-Jan-2017)
1539 candidates in under 4 minutes
Today, a few people are choosing even fewer people who will select HK's new Chief Executive. Our compilation shows the details of all 1539 candidates for 1034 seats, including 300 uncontested. Last time, the electorate of the 637 densest seats (lowest electors per seat) was 4,363. There is healthy competition in the largest electorates, including Education and Health Services, but the most they can hope for is to tip the balance if 2 establishment candidates run for the job and Beijing doesn't pick a winner and direct its agents from the small circles accordingly. (11-Dec-2016)
Shenzhen Connect southbound tracking
The Webb-site CCASS Analysis System shows the daily net change in the aggregate stock balances held by mainland investors via Shenzhen Connect. Movements correspond to trades 2 days earlier. (8-Dec-2016)
Andrew Left and the right to be wrong
We take a close look at the Market Misconduct Tribunal's report on Mr Left's erroneous criticism of China Evergrande (3333), and what that says about free speech amongst participants in the HK market. (23-Oct-2016)
Open letter to the board of Ming Fai (3828) from David Webb
Webb-site founder David Webb owns almost 10% of Ming Fai and calls for a special dividend of at least $0.352 per share to reduce net cash to not more than HK$300m (34% of net assets) after the sale of the investment property, which we support. Ming Fai has a strong core business, but if the current board, which holds 33% of Ming Fai, doesn't do the right thing then we will nominate directors who will. (19-Oct-2016)

Other news

Ex-security guard jailed for being in 1 Country, 2 Systems simultaneously
ICAC, 19-Oct-2017
Mr Yim Yiu Chuen signed in to work in HK and then went off to the mainland on 60 occasions during his working hours. His successor Li Pak Ho is accused of doing a similar thing. They were supposed to be checking for unauthorised canines at public housing estates. Perhaps they went to see a man about a dog.
Ex-Funing Property Management Ltd manager charged over festive flowers
ICAC, 18-Oct-2017
The old kumquat racket. Have you ever wondered how those plants end up in your apartment lobby? Mr Wong Kin Wah allegedly faked documents to supply Chinese New Year flowers to Wylie Court, Ho Man Tin for HK$25k.
Fung Chuen v Sandmartin (0482)
HK Court of First Instance, 17-Oct-2017
The court grants inspection of documents relating to dubious deals by Sandmartin. Deputy Judge Alex Lee writes "I am satisfied that... a reasonable case for investigating whether the loans advanced to the two Nepalese Debtors were a pretext by the Company’s directors for siphoning off the Company’s funds to the detriment of its various stakeholders including the minority shareholders".
HKEX trading floor to close on 30th anniversary of Black Monday
South China Morning Post, 15-Oct-2017
Lovely timing. After the crash on 19-Oct-1987, the Council of the Stock Exchange closed it for 4 days - that was the last time it closed apart from weather, weekends and holidays. This time, it's closing for good.
China Evergrande (3333) top at giving away shareholders' money
South China Morning Post, 13-Oct-2017
The company donated RMB1,608m in 2016, or about 9.1% of net profit. It's difficult to see how such largesse can be consistent with the board's fiduciary duty to shareholders.
Proprietor guilty of HK$200k bribery over air-con piping works
ICAC, 12-Oct-2017
He inflated a quote and then kicked back $200k or about 25% of the original quote to the assistant project manager (unnamed) of an eningeering firm undertaking the renovation of Yau Oi Commercial Complex, Yau Oi Estate, Tuen Mun - one of Link REIT's properties. The complex is now known as H.A.N.D.S., or Have A Nice Day Shopping.
Inland Revenue v Right Margin Ltd
HK Court of First Instance, 12-Oct-2017
The Commissioner loses the appeal against the decision of the Inland Revenue Board of Review that allowed the appeal by the Chinachem subsidiary. The bad debt from a joint venture developer, Victory World Ltd, was tax-deductible.
Company director charged with HK$1m SME loan fraud
ICAC, 10-Oct-2017
He returns to HK after 9 years on the run, Half the loan was guaranteed by the Government's interventionist SME Loan Guarantee Scheme. Your dollars at work. The company was compulsorily wound up in 2011.
HKICPA fines Mr Lee Ping Kai HK$30k
HKICPA, 9-Oct-2017
Filling the blanks: Mr Lee is/was a director of Pan-China (H.K.) CPA Ltd, which did the audit of GT Group (0263) for 2014 and the interim review for 2015. HKICPA fails to name either of these. Webb-site filed a complaint against the auditor with the Financial Reporting Council in Dec-2015.
Previously on Webb-site.com
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