Wednesday 2nd September 2015

Dear Reader,

Cheng & Cheng's EPS snafu
The HKICPA sanctions the audit firm and its director, but fails to disclose the listed company involved. We'll tell you who it was. (1-Sep-2015)

Challenges for China and implications for Hong Kong
Slides from a presentation by David Webb to the Oxford University Hong Kong Society annual dinner last night. (22-Aug-2015)

Ms Mak Wai Man fined HK$25k+costs by HKICPA for exaggerating CV
HKICPA, 31-Aug-2015
Unusually, the complaint came not from the HKICPA but from a member, Gilbert Cho Kui Keung. The media release states that the complaint was made under s34(1AAA). That's an indirect way of saying that after the Council decided not to refer the complaint to the Disciplinary Panels, he forced them to do so using this section. Well done Mr Cho and shame on the HKICPA - once again demonstrating why self-regulation doesn't work.

Concentration warning in Noble House (8246)
SFC, 28-Aug-2015
At today's closing price of $5.28, the company has a market value of $2266m, but its net assets at 30-Jun-2015 were $83.8m, so the loss-making firm trades at 27x NAV.

4 in court for alleged illegal use of computers to get school interview questions
ICAC, 28-Aug-2015
This is another stretch of the Crimes Ordinance using the offence of "obtaining access to a computer with a view to dishonest gain for herself or another". The ICAC says that the teachers' smartphones are computers, but presumably the claim is that the teachers used them to take pictures of the question sheets before they were returned. If they had instead used a digital camera, or even an analogue film camera, then the offence would not apply. Another reason to amend the ordinance.

Last batch of defendants sentenced for sick leave fraud
ICAC, 25-Aug-2015
Mr Cheung Siu Fai wins the frequent-liar prize for obtaining the largest number of false sick leave certificates from the Chinese Medicine Practitioner Chan Tung, with 193 of them.

Webb on "All About Money"
RTHK, 22-Aug-2015
Video segment starts at 13:23. Clips in English with Cantonese narration and subtitles.

Concentration warning in Evergrande Health (0708)
Company announcement, 21-Aug-2015
We would add that the NAV per share at 31-Dec-2014 was $0.528 (or $0.0528 after the forthcoming 10:1 split). At the closing price on 21-Aug-2015 of $16.08, the stock is valued at 30.5x NAV.

No body, no motive but securities firm director given life sentence for murdering hostess mistress
South China Morning Post, 19-Aug-2015
Ivan Chan Man Sum was an INED of Lisi Group (0526) from 14-Jun-2006 until 1-Jan-2013, 15 months after his mistress disappeared. Lisi was known as Magician Industries until 2010.

Allan (0684): AGM poll results
Company announcement, 19-Aug-2015
We voted against Prof Lo Chung Mau as INED, because he didn't attend the AGM, nor has he done so for many years. Webb-site editor David Webb holds over 11% of this company. In HK, INEDs serve at the pleasure of controlling shareholders.

HKSAR v Carson Yeung Ka Sing
HK Court of Final Appeal, 14-Aug-2015
Mr Yeung gets bail pending his final appeal to be heard from 31-May to 2-Jun-2016, on matters of "great and general importance", including the question of whether it is necessary for the prosection to prove, as an element of the offence of money laundering, that the proceeds were in fact proceeds of an indictable offence. The outcome of the appeal could mark a turning point, because until now prosecutors have relied on defendants simply having "reasonable grounds to believe" that money is dirty without proving that it is, and numerous convictions have been based on that.

Awesome Chinese missiles
People's Daily, 12-Aug-2015
Have you ever noticed that democracies don't parade their missiles in the capital on national day? Imagine that in the Mall in Washington DC on 4th July. Fireworks yes, missile displays no. OK, so the UK has trooping the colour - but that is about brass bands and men in funny hats.

China Galaxy Securities (6881) cuts final dividend after going ex
Company announcement, 7-Aug-2015
More than 3 months after completing a share placement on 5-May-2015, and after going ex-dividend on 2-Jul-2015, CGS now says that the dividend will be cut by 21% from CNY 0.16 to CNY 0.126447 per share (pre-tax) in order to divide the same amount of profit over a larger share base. This is wrong-headed. Investors who sold on or after the ex-date but before this announcement will be worse off because of it. They also persist with the inane mainland habit of declaring dividends "per 10 shares" rather than per share.

HKSAR v Rafael Hui Si Yan & others
HK Court of Appeal, 5-Aug-2015
Justice Michael Lunn sets out the timetable for the size and filing of written submissions in the appeals.

And much more besides...
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