Tuesday 28th December 2010

Dear Reader,

We hope you had a merry solstice, and wish you a happy, healthy and prosperous new solar orbit.

Christmas special

Did anyone spot that late Christmas Eve announcement by China Gas (0384)? It wasn't covered in the pre-written Monday newspapers, but it should provide some entertainment in the next few weeks. We note that the "escorted away" and now uncontactable Managing Director Mr Liu Ming Hui has, since 2007, boasted a Doctorate in Business Administration from Preston University, an unaccredited entity in the USA, formerly of Wyoming and Alabama, currently of California. This just gets better and better! He's not the only such "almunus" - check out the annual reports of China COSCO Holdings Co Ltd (1919), COSCO Pacific Ltd (1199) and China Asean Resources Ltd (8186), for more.

The year is not yet over, and we still have two more votes to go at China Resources group, which says investors simply don't understand them, after investors voted down inter-company loan proposals at two of the four companies so far with majorities of 57.7% and 66.6%, while two passed with majorities of 50.8% and 56.1%. That's hardly a vote of confidence, and CR should just scrap the whole scheme rather than bulldoze on with the surviving companies or insult the intelligence of those who opposed them. Unless they want a reputation for ignoring investor opposition, that is.

Incidentally, you can always keep up to date with our coverage of such results, court judgments and other regulatory activities by subscribing to our free RSS, Facebook or Twitter feeds. These newsletters only go out when we have an article to publish.

Your humble editor will be speaking in the Legislative Council at 4.30pm on Tuesday 4-Jan-2011 regarding the problems with the proposed Special Stamp Duty, so look out for that. Here's our written submission. Now on to today's article, hopefully the last of 2010...

NEW ARTICLE
Truly pointless bonus issues and splits
Why do boards propose bonus issues and stock splits? We look at the drawbacks and the false and misleading reasons often advanced for such actions. If liquidity is really a concern, then a reduction in board lot size is the simplest and best way to go. Splits and bonuses are more a sign of desperation than of a sophisticated, value-focussed board.

RECENT ARTICLES
Veto China Resources loans
Six HK-listed subsidiaries of China Resources group want to lend money to each other, to their parent, and to their parent's unlisted children. Webb-site urges independent shareholders to vote this down. VOTE NOW - time is short. China deserves better than a repeat of the Japanese Keiretsu system. (16-Dec-2010)

Government criticises Stamp Duty proposal
In a case of policy schizophrenia, the Government said a special stamp duty would be unfair, cause additional hardship to those in financial difficulties, and amount to double taxation. Then they proposed it anyway, based on a bunch of selective, deceptive and alarmist statistics, which we dissect. Legislators should kill this proposal or at least insert a sunset clause so that it expires with Donald Tsang's office. Exceptional times do not call for irrational measures. (26-Nov-2010)

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