Tuesday 27th October 2015

Dear Reader,

David Webb will be on RTHK Backchat tomorrow morning, talking about the cost of dishwashers. Joke: The Financial Secretary says to his wife "I'd like to go somewhere new for Christmas". She says, with an air of despair, "why don't you try the kitchen, dear"? So they go into the kitchen to check it out, and he says "this is all very nice, and I love the wine fridge, but where's the dishwasher?". She says "oh, I fired her. Couldn't afford the $12,000 per month".

NEW ARTICLES
Lerado's umbrellas and open offer
At last, Lerado (1225) admits that it holds 2% of the China Jicheng (1027) umbrella bubble, still worth HK$561m, which is more than it proposes to raise in an abusive, deep-discount open offer. The circular fails to say why they don't just sell the CJ shares instead. We call on shareholders to save themselves and vote against. (27-Oct-2015)

Sloppy accounting at China Dongxiang (3818)
Numerous errors have been found in the 2014 results and annual report, one of which is on the consolidated balance sheet for the comparative year and should have been detected by auditors PwC. (16-Oct-2015)

RECENTLY IN WEBB-SITE REPORTS
The six invalid directors of Sunway (0058) (update 27-Oct-2015)
Our analysis shows that 6 people appointed as directors before the 2015 AGM failed to stand for election at the meeting and hence ceased to be directors, so Sunway currently only has 4 valid directors. We also look at the acquisition in relation to which one of the invalid directors and the Guarantor are now being sued by Sunway, which has reported them to the Zhuhai PSB. (15-Oct-2015)

The six invalid directors of Sunway (0058)
Our analysis shows that 6 people appointed as directors before the 2015 AGM failed to stand for election at the meeting and hence ceased to be directors, so Sunway currently only has 4 valid directors. We also look at the acquisition in relation to which one of the invalid directors and the Guarantor are now being sued by Sunway, which has reported them to the Zhuhai PSB. (15-Oct-2015)

IN OTHER NEWS
CA orders trial judge to convict Stephen Chan Chi Wan, ex-GM of TVB, and Edthancy Tseng Pei Kun
ICAC, 26-Oct-2015
What a saga - over 4 years of proceedings, 2 acquittals, and it ain't quite over yet. Poon Siu Tung is Chief Judge of the District Court, by the way.

SFC bans Wong Sze Yiu, ex-Core Pacific-Yamaichi, for 6 months
SFC, 26-Oct-2015

HKEx signs non-binding MoU with itself
Company media release, 21-Oct-2015
How contrived - to wave the red flag while President Xi is on his royal visit to the UK, HKEx announces a deal between its wholly-owned subsidiaries.

Jun Yang Financial (0397) invests HK$507m in Convoy (1019)
Disclosure of interest, 20-Oct-2015
This will increase its stake from 1.15% to 9.93% after completion of the mega-placing by Convoy. That's a big chunk of the cash JYF raised in a mega-placing which completed last week.

Solartech (1166) to buy Pico Zeman Securities from Alan Lee Yuk Lun
Company announcement, 19-Oct-2015

Takeovers Panel upholds Executive decision: no MGO for China Oriental (0581)
SFC, 19-Oct-2015
The stock has been suspended since 29-Apr-2014 due to a deadlock over the public float rule.

Concentration warning in China New City (1321)
SFC, 19-Oct-2015

Dorsett Hospitality (2266) CCASS voting data
Company announcement, 16-Oct-2015
This follows a complaint from Webb-site that the CCASS voting data was omitted from the original voting results announcement. We can now see that if the CCASS Participants who were not separately represented had been counted separately then they would have added 24 and 11 to the number of holders voting for and against, so the scheme would still be approved. Subtracting the corporate representatives of HKSCCN, we see that the other registered shareholders were 28 in favour and 28 against - a tie!

The way we use Social Security Numbers is absurd. Our 2010 article
FiveThirtyEight, 15-Oct-2015
This article covers the abuse of the US SSN as an authenticator. Hong Kong has similar problem - many organisations treat your HKIC number as a password rather than an identifier. The solution, as we said in 2010, is to give fair warning and then publish the whole list of ID numbers with corresponding names, so that nobody treats them as passwords afterwards.

SFC bans Ko Shu Chuan for 6 years for fake degree
SFC, 15-Oct-2015
Well that should give her time to get a real one.

Li Xiao Yun & Xu Ying v China Gas (0384)
HK Court of Appeal, 15-Oct-2015

And much more besides...
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