Monday 7th August 2017

Dear Reader,

We interrupt our Summer holidays to bring you this:

One Board, One Regulator
We respond to HKEX's 2nd attempt to introduce 2nd-class shares via a "New Board", rather than cleaning up its existing boards and transferring listing regulation to the statutory regulator which oversees takeovers, the SFC. Coupled with recent moves to embed the Communist Party in the constitutions of state-controlled enterprises, HK and China risk a toxic combination of no votes for government and no votes for capital, leading to an emerging tycoon-Communist Party oligarchy. We propose a better approach. (7-Aug-2017)

Rebuilding free markets in HK
These slides are from a presentation by David Webb today, on how HK's free markets have eroded during the 20 years since the Handover, and what HK can do to recover its dynamism. (16-Jun-2017)

The Enigma Network: 50 stocks not to own
Sometimes, all you need to tell a story is a picture. (15-May-2017)

Licence applicant convicted for failing to disclose previous convictions to SFC
SFC, 27-Jul-2017
So that's another one to had to her list.

CSD officer, prisoner and his girlfriend charged
ICAC, 24-Jul-2017
Apparently prisoner Mr Wong Wai Leung was in need of facial cleanser, gel mask and face cream - some sort of face-saving exercise, no doubt.

HKICPA bans Andrew Lai Ka Cheung for 1 year
HKICPA, 19-Jul-2017
The reasons reveal that the client to which he had given a clean audit for 6 years was Ting Wai Monastery Ltd, which hit the news in 2015 when the chief nun Sik Chi Ding (aka Lung Yan Roy) was alleged by a director, Mary Jean Reimer, to have mismanaged funds and to have married two mainland monks to get them residency in HK.

Carpenter Tan (0837): what not to do with surplus cashPreventing cash shells
Company announcement, 12-Jul-2017
The comb maker says it's been sitting on surplus cash since its 2009 IPO, so rather than return the money to shareholders, it is buying wealth management products from Bank of Jiangsu. Net cash was 69% of net assets at 31-Dec-2016, so it meets our definition of a cash shell (exceeding 50%) and the excess (or more) should be paid out unless minority shareholders veto the payout, as proposed in our 2016 article "Preventing cash shells".

And much more besides...
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David M. Webb