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Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud...
- Thread starter TopSage
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Re: Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud..
Analyst really wear plastic bag over the head. Really hi si lang.
Anyway, I think that reuters reported the Gallus position and report in the morning.
They should have done a check before they send out.
I did a quick scan of China Minzong annual report, what Gallus said is not inconceivable.
The receivables are very high and cash flow does not reflect the increase in revenue of recent years.
Analyst really wear plastic bag over the head. Really hi si lang.
Anyway, I think that reuters reported the Gallus position and report in the morning.
They should have done a check before they send out.
I did a quick scan of China Minzong annual report, what Gallus said is not inconceivable.
The receivables are very high and cash flow does not reflect the increase in revenue of recent years.
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Re: Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud..
Singapore sovereign wealth fund GIC sold its 14.4 per cent stake in China Minzhong in February. Does the GIC know something was amiss and if it does, shouldn't it have alerted the regulators, eg SGX, MAS and Min of Finance?
Or was it just lucky and sold off at the right time-which bring into question its competence since these cooking of the books have been going on for some time. The elected president have oversight on GIC and that really makes it an issue of public interest that the opposition need to highlight in Parliament.
Singapore sovereign wealth fund GIC sold its 14.4 per cent stake in China Minzhong in February. Does the GIC know something was amiss and if it does, shouldn't it have alerted the regulators, eg SGX, MAS and Min of Finance?
Or was it just lucky and sold off at the right time-which bring into question its competence since these cooking of the books have been going on for some time. The elected president have oversight on GIC and that really makes it an issue of public interest that the opposition need to highlight in Parliament.
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Re: Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud..
Now you know why red chip like to list on SGX.
And why red chips form the bulk of foreign companies that SGX attracts.
Crooks attract crooks....pap's vision of financial hub
Now you know why red chip like to list on SGX.
And why red chips form the bulk of foreign companies that SGX attracts.
Crooks attract crooks....pap's vision of financial hub
Last edited:
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Re: Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud..
http://www.businesstimes.com.sg/pre...a-minzhong-gets-ambushed-shortseller-20130827
[SINGAPORE] In a sharply timed attack yesterday morning, Californian shortseller Glaucus Research Group sent China Minz-hong shares plunging by more than half after publishing a 49-page report accusing the China vegetable producer of fraud and financial irregularities.
China Minzhong shares fell from $1.015 to as low as 50 cents, before a share trading halt was called by the company at 11.15am. Its last traded price was 53 cents, down a staggering 48 per cent, wiping out more than $300 million from the company's market capitalisation.
China Minzhong said last night that it is reviewing the Glaucus report and will respond shortly. "The company will take all necessary steps to defend its reputation and will not hesitate to take legal action against those who put up and disseminate false or misleading statements without due regard to their truth and for the purpose of inducing others to deal in securities," it said.
Responding to a Singapore Exchange (SGX) query about its trading activity, the company reiterated its compliance with listing rules and said that other than the shortseller's report, it is not aware of any information that will explain yesterday's trading.
In its report, Glaucus cast doubts on China Minzhong's balance sheet in a manner reminiscent of Muddy Waters' attack on commodities trader Olam International last year. Glaucus alleged China Minzhong boosted sales artificially through suspicious capital expenditures and increasing receivables, amid abnormal profit margins and negative free cash flow.
Glaucus also went one step further, alleging that at the time of its listing on SGX in 2010, China Minzhong had already faked sales to its then-top two customers as well as payments to its top supplier.
Said Glaucus: "We believe that Minzhong . . . has so significantly deceived regulators and investors about the scale of its business and its financial performance that we expect trading in its shares to be halted and its shares to be worthless."
China Minzhong's biggest shareholder is PT Indofood Sukses Makmur, which holds a 29.33 per cent stake. The Indonesian food giant's shares fell 5.6 per cent yesterday. It bought part of its stake at end-February this year from Tetrad Ventures, a subsidiary of the Government of Singapore Investment Corporation. Tetrad sold the remainder of its stake to PT Indofood.
Observers have speculated that PT Indofood might even take the company private. Another major shareholder in China Minzhong is global investment firm Franklin Resources, which bought most of its 14.76 per cent stake last year.
Maybank Kim Eng Research's Wei Bin, who had put out a "buy" call with a target price of $1.36 in an earnings preview report yesterday morning, told BT it is difficult to prove if the allegations are true or false at the moment: "We need to wait for the company to come up with some announcements to clarify the questions raised," he said.
China Minzhong is the 11th company targeted by Glaucus, founded in 2011 by former investment banker Matt Wiechert, who then roped in his University of Chicago schoolmate, lawyer Soren Aandahl. Shortsellers such as Glaucus borrow shares to sell in the hope of the price going down so the shares can be bought back cheap for a profit.
The firm's attacks have been hit and miss. Its most recent attack was on New York Stock Exchange-listed real estate website SouFun Holdings in April. But SouFun has since doubled in price.
A notable success was Hong Kong-listed China Metal Recycling. In January this year, Glaucus alleged the company misled the market about the size of its business. Trading in China Metal was immediately suspended. After investigations, Hong Kong's Securities and Futures Commission recently moved to have the company wound up, with provisional liquidators suing the company's husband-and-wife founders for fraud.
China Minzhong was targeted probably because it met the aggressive growth metrics and other statistical outliers that Glaucus had said it screens for to find targets. In its 2012 annual report, the company noted that in the last five years, its revenue had grown at a compound annual growth rate of 41.9 per cent a year, while net profit grew at an average of 33.1 per cent a year.
In its financial statement for the period ended March 31, 2013, China Minzhong reported a 38 per cent rise in revenue to 2.4 billion yuan (S$502 million), and a 16.5 per cent increase in net profit to 592 million yuan.
The company went public in April 2010 at a price of $1.20 a share. Glaucus focused on what the company said were its top customers and suppliers in the initial public offering (IPO) prospectus.
Two major customers, Hong Kong Yifenli Trading and Putian Daziran Vegetables Produce, were singled out. Glaucus said a search on the website of the ICRIS companies registry in Hong Kong showed that Yifenli, which China Minzhong said contributed to its sales from its fiscal year 2007 onwards, was incorporated only in November 2009. Yifenli was a Taiwan-based food distributor according to China Minzhong, but Glaucus claimed it could not find any trace of the company being registered in Taiwan.
Meanwhile, filings with China's State Administration for Industry & Commerce also purportedly show that Putian Daziran had zero revenues and cost of goods sold in 2009. Glaucus said Daziran's inventory balance did not change in 2010, allegedly proving it was not buying vegetables from China Minzhong. It added that Daziran's supervisor Lin Guo Ping was also the legal representative of a Minzhong subsidiary, a connection that was not disclosed.
Glaucus also alleged that China Minzhong fabricated payments to Cheng Du Shu Feng Nong Ye, its largest supplier pre-IPO. The company had been deregistered and stripped of its business licence in February 2010, two months before China Minzhong went public, Glaucus said.
Glaucus then said that upon considering that China Minzhong sells to middlemen before a commoditised product reaches consumers, its yearly fresh produce segment pre-tax margins of 63 per cent to 90 per cent were abnormally high. It also highlighted alleged red flags: increasing receivables and negative free cash flow of one billion yuan since its IPO.
The report was distributed at 9.30am. At 10am, the stock was still trading at $1 a share. But a deluge of sell orders pushed the stock down: 90 cents at 10.30am, 76 cents at 11am, and a low of 50 cents in a frenetic 15 minutes of activity before the trading halt took effect.
RELATED STORIES
A sign of maturing of the local stock market
http://www.businesstimes.com.sg/pre...a-minzhong-gets-ambushed-shortseller-20130827
[SINGAPORE] In a sharply timed attack yesterday morning, Californian shortseller Glaucus Research Group sent China Minz-hong shares plunging by more than half after publishing a 49-page report accusing the China vegetable producer of fraud and financial irregularities.
China Minzhong shares fell from $1.015 to as low as 50 cents, before a share trading halt was called by the company at 11.15am. Its last traded price was 53 cents, down a staggering 48 per cent, wiping out more than $300 million from the company's market capitalisation.
China Minzhong said last night that it is reviewing the Glaucus report and will respond shortly. "The company will take all necessary steps to defend its reputation and will not hesitate to take legal action against those who put up and disseminate false or misleading statements without due regard to their truth and for the purpose of inducing others to deal in securities," it said.
Responding to a Singapore Exchange (SGX) query about its trading activity, the company reiterated its compliance with listing rules and said that other than the shortseller's report, it is not aware of any information that will explain yesterday's trading.
In its report, Glaucus cast doubts on China Minzhong's balance sheet in a manner reminiscent of Muddy Waters' attack on commodities trader Olam International last year. Glaucus alleged China Minzhong boosted sales artificially through suspicious capital expenditures and increasing receivables, amid abnormal profit margins and negative free cash flow.
Glaucus also went one step further, alleging that at the time of its listing on SGX in 2010, China Minzhong had already faked sales to its then-top two customers as well as payments to its top supplier.
Said Glaucus: "We believe that Minzhong . . . has so significantly deceived regulators and investors about the scale of its business and its financial performance that we expect trading in its shares to be halted and its shares to be worthless."
China Minzhong's biggest shareholder is PT Indofood Sukses Makmur, which holds a 29.33 per cent stake. The Indonesian food giant's shares fell 5.6 per cent yesterday. It bought part of its stake at end-February this year from Tetrad Ventures, a subsidiary of the Government of Singapore Investment Corporation. Tetrad sold the remainder of its stake to PT Indofood.
Observers have speculated that PT Indofood might even take the company private. Another major shareholder in China Minzhong is global investment firm Franklin Resources, which bought most of its 14.76 per cent stake last year.
Maybank Kim Eng Research's Wei Bin, who had put out a "buy" call with a target price of $1.36 in an earnings preview report yesterday morning, told BT it is difficult to prove if the allegations are true or false at the moment: "We need to wait for the company to come up with some announcements to clarify the questions raised," he said.
China Minzhong is the 11th company targeted by Glaucus, founded in 2011 by former investment banker Matt Wiechert, who then roped in his University of Chicago schoolmate, lawyer Soren Aandahl. Shortsellers such as Glaucus borrow shares to sell in the hope of the price going down so the shares can be bought back cheap for a profit.
The firm's attacks have been hit and miss. Its most recent attack was on New York Stock Exchange-listed real estate website SouFun Holdings in April. But SouFun has since doubled in price.
A notable success was Hong Kong-listed China Metal Recycling. In January this year, Glaucus alleged the company misled the market about the size of its business. Trading in China Metal was immediately suspended. After investigations, Hong Kong's Securities and Futures Commission recently moved to have the company wound up, with provisional liquidators suing the company's husband-and-wife founders for fraud.
China Minzhong was targeted probably because it met the aggressive growth metrics and other statistical outliers that Glaucus had said it screens for to find targets. In its 2012 annual report, the company noted that in the last five years, its revenue had grown at a compound annual growth rate of 41.9 per cent a year, while net profit grew at an average of 33.1 per cent a year.
In its financial statement for the period ended March 31, 2013, China Minzhong reported a 38 per cent rise in revenue to 2.4 billion yuan (S$502 million), and a 16.5 per cent increase in net profit to 592 million yuan.
The company went public in April 2010 at a price of $1.20 a share. Glaucus focused on what the company said were its top customers and suppliers in the initial public offering (IPO) prospectus.
Two major customers, Hong Kong Yifenli Trading and Putian Daziran Vegetables Produce, were singled out. Glaucus said a search on the website of the ICRIS companies registry in Hong Kong showed that Yifenli, which China Minzhong said contributed to its sales from its fiscal year 2007 onwards, was incorporated only in November 2009. Yifenli was a Taiwan-based food distributor according to China Minzhong, but Glaucus claimed it could not find any trace of the company being registered in Taiwan.
Meanwhile, filings with China's State Administration for Industry & Commerce also purportedly show that Putian Daziran had zero revenues and cost of goods sold in 2009. Glaucus said Daziran's inventory balance did not change in 2010, allegedly proving it was not buying vegetables from China Minzhong. It added that Daziran's supervisor Lin Guo Ping was also the legal representative of a Minzhong subsidiary, a connection that was not disclosed.
Glaucus also alleged that China Minzhong fabricated payments to Cheng Du Shu Feng Nong Ye, its largest supplier pre-IPO. The company had been deregistered and stripped of its business licence in February 2010, two months before China Minzhong went public, Glaucus said.
Glaucus then said that upon considering that China Minzhong sells to middlemen before a commoditised product reaches consumers, its yearly fresh produce segment pre-tax margins of 63 per cent to 90 per cent were abnormally high. It also highlighted alleged red flags: increasing receivables and negative free cash flow of one billion yuan since its IPO.
The report was distributed at 9.30am. At 10am, the stock was still trading at $1 a share. But a deluge of sell orders pushed the stock down: 90 cents at 10.30am, 76 cents at 11am, and a low of 50 cents in a frenetic 15 minutes of activity before the trading halt took effect.
RELATED STORIES
A sign of maturing of the local stock market
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Re: Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud..
Wei Bin has to come up with some explanations himself.
PRC can be trusted ?
Expect more of the same as our system is now flooded (ponded) with PRC's .PRC companies are now involved in building MRT systems and HDB flats just like Pinoys and Indian FT's doctors in public hospitals.
Wei Bin has to come up with some explanations himself.
PRC can be trusted ?
Expect more of the same as our system is now flooded (ponded) with PRC's .PRC companies are now involved in building MRT systems and HDB flats just like Pinoys and Indian FT's doctors in public hospitals.
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Re: Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud..
This lousy piece of shit Kim Eng analyst should be analed for putting a Buy recommendation without doing due diligence in studying the books of the company.
This lousy piece of shit Kim Eng analyst should be analed for putting a Buy recommendation without doing due diligence in studying the books of the company.
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Re: Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud..
counter has now shot up by as much as 115% on lifting of trading halt ...
did u shot ze counter? ...
counter has now shot up by as much as 115% on lifting of trading halt ...
Re: Singapore list S-Chip China Minzhong collapse 47% from alleged accounting fraud..
No. I was merely reporting what happened to the stock. No where did I even remotely suggest anyone try to short this stock. Shorting stock is a dangerous activity because corporate deals done behind the members can kill short sellers.
If you ask me Glaucous can be right about CMZ and still lose money because they walked into a trap.
No. I was merely reporting what happened to the stock. No where did I even remotely suggest anyone try to short this stock. Shorting stock is a dangerous activity because corporate deals done behind the members can kill short sellers.
If you ask me Glaucous can be right about CMZ and still lose money because they walked into a trap.
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