Sunday 14th April 2019
Dear Reader,
NEW ARTICLE
SFC action
is too little, too late for minority shareholders of Luxey (8041)
The SFC seeks disqualification of 2 ex-directors, but fails to seek any recovery
of Luxey's HK$350m, 7-fold overpayment in an acquisition from an alleged nominee
of then Chairman Joseph Lau. We first documented this case and numerous other
suspicious transactions involving Luxey and other listed companies in a series
of articles in 2012. This is the only one to see any action, and it falls far
short of what is needed to provide a deterrent. (14-Apr-2019)
RECENTLY IN WEBB-SITE REPORTS
The national
investment fund that isn't
A Friday night announcement
illustrates all that is wrong with HK's Listing Rules for closed-end
funds. (23-Mar-2019)
Hopewell
and the lemon discount
What does the ability to take a
company private for 57 cents on the dollar say about the future of HK's public
market? Failure to reform HK's laws and regulations to improve the corporate
governance framwork will see the market shrink over time as good companies stay
away and controllers take existing companies private. (22-Mar-2019)
IN OTHER NEWS
Former ED
of DBA Telecom (3335) convicted of issuing false or misleading announcement,
fined HK$60k
SFC, 11-Apr-2019
SFC
prosecutes solicitor Leung Pak Keung, alleges insider dealing in CASH Financial
Services (0510)
SFC, 11-Apr-2019
SFC tells
off Gordon Wu's father-in-law for cashing in early and failing to say so on time
SFC, 10-Apr-2019
Kwok Tse Wah is the
father of Ivy Wu Kwok Sau-ping. He is quite possibly the oldest person ever to
be sanctioned under the Takeovers Code.
Kingdee (0268) aborts acquisition from its Chairman of CloudHub
Company announcement, 4-Apr-2019
Citing
"varying market interests" after the acquisition was announced, Kingdee
"considers that this will allow management attention and resources to be devoted
to other arising business initiatives and opportunies" - their real estate
business, perhaps. No word on how the Chairman proposes to divide his attention
between Kingdee and his private businesses or whether they will now repay debts
to Kingdee.
SJ v Cheng Ka Yee & others
HK Court of Final
Appeal, 4-Apr-2019
As we predicted last August, HK's highest court
confirms that the Government has been overreaching by charging people with
"obtaining access" to their own computers with criminal or dishonest intent. In
such cases the Government must now prove the core offence rather than using the
catch-all "but she used her computer/ smartphone/ smartwatch to prepare for an
offence". You can't "obtain" something you already have.
Ex-assistant manager of Friends of the Earth charged with using fake credentials
ICAC, 2-Apr-2019
The moral: if you're
going to fake your credentials, at least pick real qualifications. He allegedly
claimed a Master's from HK Baptist University in a course they do not offer and
associate membership of the Chinese Institute of Certified Public Accountants, a
status they do not offer. It also appears that FoE doesn't bother to verify
credentials.
ASTRI
director charged with MIPO over purchase orders
ICAC, 29-Mar-2019
Of course, if the HK
Government stopped throwing public money at private businesses, then the
Innovation & Technology Fund and ASTRI would be shut down and there would be no
such public office in which to misconduct oneself.
Ex-Centaline supervisor jailed over HK$1.2m kickback
ICAC, 28-Mar-2019
This almost certainly
relates to Flat A on 46/F (the top floor) of 39 Conduit Road, which went for
HK$594.76m or $107,435 per saleable sq ft. Nothing else on Conduit Road comes
close to that price.
HKICPA
fines BDO Ltd, Amos Li Wing Yin & Alvin Au Yiu Kwan HK$50k in total
HKICPA, 26-Mar-2019
Mr Au was also fined
last June for his work at Baker Tilly on the 2006 audit of Egana, a US$1bn
fraudulent company which collapsed following our whistle-blowing article in
2007. This time the fine relates to the audit of impairment of goodwill at Rosan
Resources (0578) at 31-Dec-2012. Mr Li has since moved on to be a director of
Moore Stephens CPA Ltd.
HKICPA
fines Herbert Chan Chant Fai HK$200k for auditing his wife's company
HKICPA, 20-Mar-2019
Or, one might say, for
book-keeping it in the family.
And much more besides...
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David M. Webb
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