Sunday 30th January 2011
Dear Reader,
We have to return to this important subject - because it is exemplary of the interventionist trend that is undermining HK's economic foundations:
NEW ARTICLE
SSD, the Basic Law, and a lesson from Singapore
The
Government has responded to LegCo on our concerns that the proposed Special
Stamp Duty is unconstitutional. We go further in this article, explaining why
SSD would not be a legitimate tax protected by Basic Law Article 108. We'll also
look at the lesson in political reality from Singapore's 1996-97 experiment, and
we propose a fairer, focused alternative, in the form of a withholding system
for profits tax. (30-Jan-2011)
RECENT ARTICLES
CRE: more needed on the port flip
CRE (0291) has issued a
bland denial that its parent owes it anything under the profit-share for the
on-sale of its stake in Hutchison's ports. The calculation under that agreement
in itself amounts to a connected transaction. We call for full disclosure of the
apportionment of proceeds received by CRH, backed up by independent valuation of
the other assets CRH bundled in. Without better information, we conservatively
estimate a gain of $1,927m. The interests of CRE independent shareholders have
not yet been protected. (28-Jan-2011)
Nagacorp controller's
dealings
A recent court case highlights the dealings of Chen Lip
Keong, controlling shareholder of Cambodian Casino firm Nagacorp (3918). Given
his numerous outside interests, and the ongoing pledges of shares, investors
should be concerned about how much debt he might be carrying and the risk that
he may need to, or be forced to, sell part or all of his stake in Nagacorp. (28-Jan-2011)
Ex-chaos trading:
Zhongtian proves point
Zhongtian (2379) yesterday demonstrated why we
should not trade ex-entitlements before they are approved by shareholders: a
10:1 rights issue at a 97% discount was vetoed. HKEx launched a consultation in
December, and we need your support. We also repeat two outstanding
problems which HKEx has failed to address, on expropriation of passive
shareholders' value, and on the discounts on open offers. (27-Jan-2011)
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