China Gaoxian

This may sound like Mafia, but the authorities should simply arrest Cao Xiangbin and Raymond Wong, lock them up, break one of their legs each, and make them pay back whatever money that is missing.

If they co-operate and the money is returned, put back their legs - with full medical costs for the account of the company. If not, break the other leg, and then throw them out on the streets.

Sounds like a crazy idea, right? But it may just work to get back the money that is missing, give a serious warning to all the corporate thieves of the world, and deliver some justice - quickly and effectively.

http://info.sgx.com/webcoranncatth.nsf/V...F0037973F/$file/Announcement30June11.pdf?openelement


While the Special Auditors are still in the process of verifying bank balances of the Group, they have todate obtained evidence which suggests the aggregate cash and bank balance of the Group as at 31 December 2010 was approximately RMB 93 Million, as compared to RMB 1.1 billion as stated in the unaudited financial statements announced by the Company ....

The special auditors also noted that the Group has outstanding bank liabilities of approximately RMB 285 million as at 31 December 2010, as compared to RMB 157 million as stated in the Unaudited Financial Statements

I am speechless....the audacity of the powers that be. What goes around, comes around.

93 million vs 1.1 billion, that's a huge difference....

where has the money gone?

They raised S$228 million from the KRX dual listing in Jan 2011. Where did this sum go to in the space of 3 months ? I am speechless at the blatant theft which will most likely go unpunished !

Wow RMB 1 billion missing? This is truly astounding (in a bad way)!

And to think the Company managed to fool not just one exchange, but two! I have to hand it to these people - they are masters of deceit, disguise and deception......

Please, will the authorities just catch them and lock them up for a long, long time??

Musicwhiz Wrote:Please, will the authorities just catch them and lock them up for a long, long time??

The only authorities who can lock up the thieves are the Chinese authorities, and they have bigger fish to fry than some small-time white collar criminals stealing money from foreigners.

Now if you steal CHINESE money or create social unrest IN CHINA that is a different story. For example, the former mayor of Shanghai was involved in a scandal where money was siphoned off from Shanghai's social security fund. He is now serving an 18-year prison sentence. The boss of China Printing & Dyeing abandoned his factory, and 1,000 of his workers protested and raised a ruckus. He was arrested within 2 months.

The boss of Oriental Century? Living in China as a free man - in fact he gave The Edge an exclusive interview some time back describing how he stole the money. The company itself? It's been delisted and will be liquidated.

China Sun Biochem? To be liquidated. Nothing happening to the boss.

Celestial Nutrifoods? To be liquidated. Nothing happening to the boss.

Anyone who thinks that "the authorities" will actively prosecute white collar crimes committed overseas is dreaming. Extradition is a tedious process and reserved for extremely serious crimes e.g. human trafficking, drug trafficking, weapons smuggling, and money laundering.

Investors have to learn to be more skeptical. Veterans of the original Wallstraits forum may remember "huanminwu", who was openly critical of the Chinese companies listed on SGX. There were members who thought he was exaggerating about the problems at the S-chips. 6 years on, it seems he was right to be so critical.

An investor's best defense is common sense. Make sure it is not blinded by greed.

(30-06-2011, 11:57 PM)d.o.g. Wrote: Investors have to learn to be more skeptical. Veterans of the original Wallstraits forum may remember "huanminwu", who was openly critical of the Chinese companies listed on SGX. There were members who thought he was exaggerating about the problems at the S-chips. 6 years on, it seems he was right to be so critical.

Thanks d.o.g., yes I know it's highly unlikely the perpetrators will be punished. Just letting off some steam on behalf of aggrieved shareholders. But like you said, common sense should prevail and make one very wary of such companies in the first place, and I think these dubious companies are not difficult to identify and avoid.

That said, I only joined Wallstraits around 2006 and thus do not remember such a member "huanminwu". Would you happen to have any postings retained (copied/pasted) by this sharp ex-member which you can share? What specifically did he warn about S-Chips? Was it a corporate governance problem or the fact that China Companies are just darn good at concealing such frauds?

(01-07-2011, 12:04 AM)Musicwhiz Wrote:

(30-06-2011, 11:57 PM)d.o.g. Wrote: Investors have to learn to be more skeptical. Veterans of the original Wallstraits forum may remember "huanminwu", who was openly critical of the Chinese companies listed on SGX. There were members who thought he was exaggerating about the problems at the S-chips. 6 years on, it seems he was right to be so critical.

Thanks d.o.g., yes I know it's highly unlikely the perpetrators will be punished. Just letting off some steam on behalf of aggrieved shareholders. But like you said, common sense should prevail and make one very wary of such companies in the first place, and I think these dubious companies are not difficult to identify and avoid.

That said, I only joined Wallstraits around 2006 and thus do not remember such a member "huanminwu". Would you happen to have any postings retained (copied/pasted) by this sharp ex-member which you can share? What specifically did he warn about S-Chips? Was it a corporate governance problem or the fact that China Companies are just darn good at concealing such frauds?

I remembered him too. He posted most of his comments in the paid WS8 forum and were always critical of s-chips.
In a way, many of us were overly excited over the high growth of these s-chips that we failed to take the heed of a local PRC.

Business Times - 01 Jul 2011

PwC finds shortfall of 1b yuan in balance: Gaoxian

Probe to find out how shortfall has been used

By LYNN KAN

PRICEWATERHOUSECOOPERS (PwC), which was appointed as special auditors to review the state of affairs at China Gaoxian, has found an apparent shortfall of one billion yuan (S$189.8 million) in the group's cash and bank balance as at Dec 31, 2010.

China Gaoxian's FY2010 unaudited financial statements had shown a cash and bank balance of 1.1 billion yuan. But PwC, which is still verifying the group's bank balances, has to-date obtained evidence which suggests that the aggregate cash and bank balance of the group as at Dec 31, 2010, was about 93 million yuan, China Gaoxian said in an update of the review yesterday.

PwC also noted that the group had outstanding bank liabilities of about 285 million yuan as at Dec 31, 2010, compared with the stated 157 million yuan in the unaudited financial statements.

PwC was appointed special auditors in April to review China Gaoxian's financial position for fiscal 2010 and the quarter ended March 31, 2011. Trouble had started in late March last year when its auditors Ernst & Young could not verify the Dec 31, 2010, bank balances of two of China Gaoxian's subsidiaries.

Yesterday's update said that following instructions from independent directors, PwC is now trying to nail down how the shortfall of one billion yuan has been used. PwC will subsequently also assess the full financial impact on the group.

The company dual-listed on the Korea Exchange (KRX) in late January, when it raised 1.13 billion yuan to expand its business and build its 'Huaxiang Project', a plant in Huzhou City, Zhejiang, to produce PET chips and differentiated polyester yarn.

During the course of the special audit, China Gaoxian had told independent directors that it had entered into several contracts with equipment suppliers and contractors in connection with the Huaxiang Project with a total contract value of about 1.2 billion yuan, of which about 391 million yuan was said to have been paid. The group said about 95 million yuan is now due to be paid under the payment schedules.

China Gaoxian's independent directors had instructed the management to suspend payments to these parties. But China Gaoxian said yesterday that 'any delay in making these payments may lead to a delay in the delivery of the equipment and/or the construction of the Huaxiang Project and result in the company defaulting on its contractual obligations'.

China Gaoxian's independent directors intend to appoint independent advisers to advise shareholders about whether the Huaxiang Project is commercially viable and whether China Gaoxian can complete and operate it. Shareholders' ratification will be sought after the special audit is completed and after independent advisers have concluded their findings, said China Gaoxian.

Trading of China Gaoxian's shares and Korean depository receipts remains suspended on the SGX and KRX, respectively, pending the verdict on its financial status.

SGX continue to remain silent on the use of the word Fraud? Why SGX behave this way like our Sg Gov is strange. Our gov pride itself as being strict and impartial. Now Crooks are flooding the country and not 1 correct term has been used. Is our gov gutless when it deals with the chin na? Why is it so? Is our gov beholden to national interest at large?

The fact that they are the cause of a double standard that made Spore xenophobic of foreigner is more representative of S-chip. Can you imagine how shocking this is when GaoXian start trading at 3cts?

Chin na crooks robbed the Co. and the smart chin na boss gets a pad in the back by communist cadre leaders! Rule of law? We will never know what is going on in S chip?

The surprising thing about this crime is that the lost millions are now not questioned and a new chin na/HK investor group has emerged as the victor with a unknown status, at 3cts a share?

Justice has been served and lets move on! This is Spore, our gov now has no balls to pursue justice!