Monday 22nd August 2011

Dear Reader,


SFC's neighbours will celebrate
The SFC, to the relief of fellow tenants, is reportedly set to move out of Chater House in June 2013. We ask why the police and their masters have been so reluctant to enforce the Noise Control Ordinance against protestors, and what tenants and passers by at their reported new home can look forward to. The landlord, controlled by HK's biggest tycoon, has 7 listed companies and 2 REITs in the group, all ultimately regulated by the SFC, so there is a risk of future perceived conflicts of interest which it would have been better to avoid. (22-Aug-2011)


Capital VC (2324) and Longlife (8037)
Our analysis shows that a general offer may have been triggered for Longlife and possibly for Capital VC too. We look at the close relationship between the two and the people involved. We also ask how a person could continue to act as director of a valuer, issuing valuation opinions for numerous listed companies, without disclosing that he was bankrupt at the time. (14-Aug-2011)

HSBC's StockMax becomes StockMin
It was a false dawn for retail investors - the SFC has caved in to pressure and amended the license conditions of HSBC's Stockmax Crossing platform to restrict it to "professional investors" only. History will prove them wrong. (14-Aug-2011)


Real Gold: breach of Listing Rules - loan of HK$955m and acquisition from controlling shareholder
Company announcement, 22-Aug-2011
This story just gets better and better. In 2011 Q1, the company advanced HK$449.2m to controlling shareholder Wu Ruilin for $520m purported acquisitions of Mongolian phosphorous mines which have not yet completed, and in Feb-Apr-2011, it lent Mr Wu $955m, of which $316m was outstanding at 30-Jun. No wonder Mr Wan, the newly-appointed INED, has quit - he must have been horrified.

Peter Wan Kam To quits as Real Gold INED after 25 days
Company announcement, 21-Aug-2011
Real Gold has not yet published the reasons he gave for resigning, if any. This suggests that the former PwC partner expressed substantial concerns - otherwise the company would just have published them. His base fee was a generous HK$1.008m p.a. with a maximum of $1.68m, so this was probably not a question of money. And he wants to skip the 30-day notice period - there's a man in a hurry!

Capital VC (2324): Market Misconduct Tribunal enquiry against 2 EDs
Company announcement, 19-Aug-2011
The company gets around to announcing something that Webb-site pointed out on 14-Aug-2011.

Longlife (8037) resumes trading
Company announcement, 18-Aug-2011
The company fails to mention that it owned about 8.41% of Capital VC (at last filing) or explain why it bought those shares. The announcement is signed by Cheung Hung, Chairman of Longlife. As we noted in our article, he is a former NED of Capital VC.

Capital VC (2324) combined stake in Longlife (8037) with Mr Yau exceeded 30%
Company announcement, 17-Aug-2011
This follows our article of 14-Aug-2011. We alerted the SFC on 11-Aug-2011. CVC says that from 10-Jun-2011 to 28-Jul-2011, it and Mr Yau had a combined stake over 30% in Longlife. CVC will consult the SFC for a ruling or waiver, but defiantly says "irrespective of the result", it will not make a general offer and Mr Yau won't either. SFC urges CVC and Mr Yau to comply with the Takeover Code or face disciplinary action in respect of any breach. Watch this space.

K&L Gates v Navin Kumar Aggarwal
HK Court of First Instance, 18-Aug-2011
"The Defendant was a former partner of the Plaintiff. During his tenure and over a course of years, he had stolen vast sums of the Plaintiff or from its clients' accounts...The Injunction Order restrains the Defendant, amongst others, from disposing of assets up to HK$621,000,000..."

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