Monday 26th September 2016

Dear Reader,

Time to rake some muck and see what our for-profit listed regulator lets companies get away with...

China Innovative Finance (0412) bubble
Hao Tian Development (0474) has confirmed our view by dumping 9.06% of CIFG at a 61.9% discount, still well above the net tangible asset value of $0.099. CIFG should trade below NTAV due to its appalling governance and membership of what we call the "Chung Nam Network". The purported profits of its leasing division are largely illusory and depend heavily on 1 customer in which CIFG has invested. HTD has also been allowed by HKEX to skirt the Listing Rules on corporate transactions.. (26-Sep-2016)

Submission to SFC-HKEX consultation on listing regulation
These are our views on SFC-HKEX proposals to reform regulation of listings and listed companies. If you are an investor who cares about the future of HK's markets, please submit your support. The proposals are better than the status quo, but a political compromise on the 2003 Expert Group recommendation to transfer regulation to the SFC, and that should be Plan B. (6-Sep-2016)

Company director Chen Zhengxi charged with bribing HSBC staff with perfume
ICAC, 23-Sep-2016
One Country, Two Systems. The staffer immediately smelled a rat.

Legislators visit ICAC and the Three Rickies
ICAC, 23-Sep-2016
...and the current ICAC Commissioner Simon Peh "reiterated that ceasing the acting arrangement of an individual officer [Rebecca Li] had absolutely nothing to do with any investigations [of C Y Leung's payments from UGL]". This is getting UGLy.

Censure of Global Bio-chem (0809) and ex-directors
SEHK, 23-Sep-2016

C.P. Lotus (0121): Li Wen Hai is our Executive Chairman but not Chairman
Company announcement, 19-Sep-2016
This follows a complaint by Webb-site that the Articles of Association only allow for one Chairman. The "One Company, Two Chairmen" formula does not work.

Zall (2098): we have two Co-chairmen but our articles don't allow it
Company announcement, 14-Sep-2016
Zall clarifies that only one of them is responsible for the legal duties of Chairman, but they will try to amend the Articles. This follows a complaint from Webb-site that appointing two Chairman was ultra vires. It's the least of their problems though - the stock is in a bubble, in our view.

HKICPA fines Ernst & Young and partner Stephen Hui Kin Fai HK$30k
HKICPA, 12-Sep-2016
They doesn't name the listed firm involved, but Webb-site can tell you it was New Century Group HK Ltd (0234), in relation to the sale of a hotel in Batam, Indonesia.

Jewellery customer charged with HK$30k bribe for refund of diamond ring
ICAC, 8-Sep-2016
Ng Yuk Keung is the Finance Director of Kingsoft (3888) and INED of 3 other listed companies: Sany Heavy Equipment (0631), E-Commodities (formerly Winsway Enterprises, 1733) and Zhongsheng (0881).

And much more besides...
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