Wednesday 30th January 2019

Dear Reader,

We'll be on RTHK Radio 3's Backchat program at 08:33 this morning (podcast later), taking about the tax system. Our new article relates to this.

NEW ARTICLES
A simpler, fairer tax system
There are calls for a rental deduction for HK salaries tax, to compensate for the mortgage interest deduction. Both miss the point. Governments should not use tax breaks to distort consumer choice. Give people unconditional higher personal allowances instead, and introduce a flat rate of tax above that. Also, abolish the tiered rate of profits tax and the R&D deduction, 2 gimmicks introduced by Carrie Lam. (30-Jan-2019)

RECENTLY ON WEBB-SITE
Why stock-plunges happen so often in HK
We explain the 20-year history to a statutory loophole which keeps investors in the dark on share pledges. (24-Jan-2019)

Jiayuan (2768) Chairman should expect the SFC's call
After denying any knowledge of reasons for last Thursday's crash, Jiayuan now says that 3.73% of the Chairman's stake was dumped in a forced sale due to enforcement of share charges and/or margin financings. (23-Jan-2019)

IN OTHER NEWS
Chairman Yao Jianhui & others pledge 12.14% of China Goldjoy (1282) to Huarong Inv (2277)
Disclosure of interest, 29-Jan-2019
The shares were pledged by Mr Yao's wholly-owned Tinmark Development Ltd to Chelsea Manifest Fund, wholly-owned by Huarong Inv. Of the 3.14bn shares, 1.97bn were from Tinmark. The source of the others is unclear.

Celebrate (8212) to buy Hope Securities Ltd from David Ki | CCASS transfer
Company announcement, 29-Jan-2019
The broker, licensed on 9-Apr-2018, has only 2 licensed staff and only one stock in its CCASS account, Imagi (0585), transferred last Friday from Satinu Markets Ltd. Celebrate, Imagi and Satinu are all part of what we call the "Chung Nam Network". The deal is subject to SFC approval for the change of substantial shareholders of the broker.

Skyline Credit Ltd v Leung Hing Chung
HK Court of First Instance, 23-Jan-2019
A HK$1.8m loan is unenforceable, due to a classic arranger scam which extracted fees of $830k, leaving the interest rate on the net loan at well over the 60% p.a. legal limit. Deputy Judge William Wong SC writes, in relation to the law firm involved: "I am of the view that the irresistible inference is that KB Chau knew that the Plaintiff and Lamto were acting in concert. It appears to me that KB Chau did facilitate the collusion…I find the conduct of KB Chau merits investigation."

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