Sunday 18th April 2010

Dear Reader,

NEW ARTICLE
Multiple statutory derivative actions
David Webb responds to the Legislative Council's invitation for comments on proposed amendments to the statutory derivative actions regime. In its current form it is unlikely to be useful to public shareowners of listed companies, but we suggest how to improve it. We also call on the Administration and Legislators to get behind class actions, litigation finance and contingent legal fees. Justice is the friend of fair societies, and litigation is the path to it.

RECENT ARTICLES
Imagi bubble
We issue a bubble warning on Imagi (0585), up 616% in 4 days on turnover of 185% of the company. The confusing timetable, with a 10:1 consolidation yet to come, has likely contributed to more chaos than we have seen since Asian Citrus. The market price implies a valuation of 33.2 times book value, or a premium of HK$17.3bn (US$2.23bn). We think a discount would be more appropriate, for the characters involved. (14-Apr-10)

Who's who in HK's elite
Webb-site.com today launches a new database feature, with past and present membership of the hundreds of statutory and advisory bodies appointed by the Government, as well as the Election Committee, Executive, Legislative and District Councils, adding to our database of listed company directors. If your organisation is important, but not a listed company or government body, then help us add it to the database. (12-Apr-10)

HKEx AGM: veto item 7
We urge shareholders of HKEx (0388) to veto a proposed change to the Articles of Association which would damage good governance and facilitate the stifling of dissenting views. We speak from first-hand experience. HKEx is setting a bad example to the companies it regulates, and the rot should stop now. In passing, we also cast an eye on the ongoing CITIC Pacific case. (11-Apr-10)

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