Sunday 7th October 2018

Dear Reader,

If the HKSAR Government thinks that FT Asia news editor Victor Mallet has committed any crime by acting as moderator at an FCC lunch talk by independence advocate Andy Chan Ho Tin (or any other crime), then they should charge him (and Chan) and give them a fair trial and the presumption of innocence unless proven guilty. That is what the "rule of law" is supposed to provide - not the abuse of immigration discretion to deport people whose behaviour is not proven to be illegal, but is disliked by government. Trials should be conducted in the courts, not on the desk of the Director of Immigration.

In 27 years in HK (20 as a Permanent Resident, with no visa required), this is the first time I have heard of anyone (journalist or not) being denied a renewal of visa to continue the same job with the same employer. HK's system was supposed to be different to China's. Gradually, they are removing the "Special" from the SAR. From now on, the Foreign Correspondents' Club will have to use only Permanent Residents to host controversial speakers, if they do so at all.

Now, back to business:

NEW ARTICLE
China First Capital (1269) and a questionable joint venture
Webb-site finds serious problems with CFC's statements about a GBP60m UK start-up joint venture with a BVI company, the owner of which is not disclosed, which has only partly paid for its share of the JV. (7-Oct-2018)

RECENTLY ON WEBB-SITE
Huarong and the Chung Nam Network
Webb-site can reveal another SFC investigation underway involving dealings in Pak Wing (8316). The manipulation of this GEM bubble reveals another connection between China Huarong (2799) and what we call the "Chung Nam Network". The more we scrutinise Huarong, the worse it looks. Will the State end up bailing out the bailer? (3-Oct-2018)

Breaking: SFC freezes up to HK$10.17bn of assets in 3 brokers
Webb-site has deduced that these are assets of Mr Yang Zhihui, missing Chairman and majority shareholder of Landing (0582), and that he is reasonably suspected of fraud causing losses of HK$10.17bn to China Huarong (2799), the ex-Chairman of which is under a corruption investigation in China. We also turn the spotlight on China Goldjoy (1282) which was an enthusiastic buyer of Landing at prices far higher than its Chairman paid beforehand. (1-Oct-2018)

HKEX: shoot patients to prevent illness
HKEX's proposal to suspend and then delist companies with disclaimed audits works against investor interests in several ways while doing nothing to address the root causes of corporate illness. In a partial revival of the 2002 Penny Stocks proposals, the self-interest of HKEX in ditching unprofitable business cannot be ignored. We again call for the regulatory function to be transferred to the SFC and HKEX's monopoly to be abolished. Only when there is competition can they pick and choose their customers. HKEX fails to name the 43 firms that would have been suspended on their 2017 audits. Answers by Tuesday morning, please! (30-Sep-2018)

IN OTHER NEWS
Trio sentenced for bribery and disclosing identity of person under ICAC probe
ICAC, 5-Oct-2018

CE & SJ v Edward Yiu Chung Yim: no costs awarded against him
HK Court of First Instance, 4-Oct-2018

Webb on China Huarong (2799), Landing (0582) and Yang Zhihui (excerpt)
CNBC, 3-Oct-2018

Freeman (0279) renegotiates convertible bond held by Huarong Inv (2277) | Huarong Inv announcement
Company announcement, 28-Sep-2018
The share price having boomed and then bust since the CB was issued, they have agreed to slash the conversion price from $0.425 to $0.065 and boost the coupon from 4% to 7%. As a result, Huarong Inv could end up with 29.63% of Freeman, which also has outstanding US$99m of convertible bonds held by the parent of Huarong Inv, China Huarong Asset Management (2799), also convertible at $0.425.

Police Superintendent and 2 others admit bribery over operation of private clubs
ICAC, 27-Sep-2018

And much more besides...
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David M. Webb
Editor, Webb-site.com