Sino Grandness

[Oldman9]

Maybe Specuvestor mixed up the roles of auditors and reporting accountants.

Reporting accountants are not expected to conduct audits.


http://www.bdo.co.uk/capital-markets/act...ransaction

Hi Specuvestor,

Are you confused with the roles ?
Your comments earlier gave me some unnecessary jitters. I believe other investors also felt jittery. So what now?

I went to take a look at the draft prospectus of Qiniqin Foodstuff as suggested by Portuser. Same thing... So can you comment please?

Thanks and cheers
oldman9

Hi oldman9

The context was PiaoPiao stated "As reporting accountant, bdo would have reviewed the work of qual-mark hk, yida shenzhen, tiancheng hubei, sanhe sichuan and wanbang sichuan and form an opinion. If bdo is uncomfortable, it would not have accepted the appointment as reporting accountant."

BDO in their Accountant's Report has already stated "no audited financial statements have been prepared" and "The Financial Information has been prepared from the Underlying Financial Statements, with no adjustments made thereon" and "The directors of the Company are responsible for the preparation and the true and fair presentation of the Financial Information" ie the accuracy is not BDO's problem. There is no reason for BDO to be uncomfortable if the Board agrees to this basis. I didn't want to write all these down in my previous post cause I think better for forumers to read the whole context.

This type of creating a new entity for listing is also not new. Neither are S-chips new. But it's not common to create BVI entity on top of Cayman for listing. I'm not familiar with the details but we have auditors and accountants in this forum that might be able to advise us on what is the incentive.

The context is also that you and I know the chairman said the auditor will be a big 4 for the IPO in the last AGM. People specifically asked this for a reason. That's why we have been asking who is the auditor and who is the sponsor. Qinqin foodstuff is a spinoff from parent which is well known Hengan, whose auditor is PWC.

The fact is also that with 1/2 Huiyuan's sales and likely less than half Huiyuan's geographical coverage, they have double Huiyuan's income, and have also defaulted on the CB not once but twice (2nd time being June/ July last year), even after Chairman say during AGM categorically that they will pay back all. That is when I decided this looks too familiar and it is not my game. It is amazing to me that some forumers think the CB owners are philanthropic or that the power of negotiation still lies with SinoGrand after they defaulted.

The fact is also that if they manage to IPO GardenFresh then all the analysis is moot, at least for a few years. Their cashflow issue would have been resolved and none wiser. Management is hosting a luncheon next Tuesday to institutions on their results, but likely focus will still be on the IPO... so let's see how they come out of it.

What I am concern is what people learn from this episode, which is my incentive for taking lunchtime to post. VB has been a great place for me and others to browse, and I think many people take it as a serious and insightful forum, though it has less post in a day than some other forums in an hour. And I think VB has a great track record in fundamentally analyzing key events and identifying issues before they become apparent, which I hope the track record can continue.

So that's my way of paying forward by giving whatever facts I know. AGM is 25 April and I think their accounting numbers in 1Q should be good as previously posted.

Hi Specuvestor

thanks for your long  explanation .

With ref to you 1st april post,   http://valuebuddies.com/thread-3371-post...#pid127794,  you said you were keen to know who is  the sponsor and auditor. Obviously you did not know then there is no appointment of auditor. I don't think you know then that the parties to be appointed is the reporting accountant and not the auditor. And the job of the reporting accountant is to review the performance of the auditor.

If there is a factual error,  it should be corrected. VB would then be a good forum for the healthy exchange of views.
Many thanks for your effort.

Cheers
Oldman9