Kingsmen Creatives

[KopiKat]

One way would be for Contractor B to get a Bank Loan. No collateral, how? Possibly, 2 of the Kingsmen employees acted as their guarantor... ie. 'Personal Guarantee' provided...

My view:

IMO a rational employee would not likely put up his personal networth to be a bank guarantor for a subcontractor of his employer, especially one that is small and without much assets, especially when the reason is as innocent as to help a subcontractor manage cashflow and benefit accrues to his employer/subcontractor and not himself.

I am also dubious of the kind of bank that would accept such arrangement.

Let me dig into my imagination for a possible scenario...

So, what if this rational employee happens to be the Project Manager who's managing a project run by the contractor and has to meet a tight schedule? Contractor is unable to expedite as no cash to pay sub-con who refuses to work unless they're paid? Employee + Contractor had already pushed Kingsmen for payments but MGMT continue to drag their feet as they have 101 other things of higher priority to do? How?? How?? Exhibition going to start soon and work only half completed??

Looks like project is doomed for failure unless the MGMT turns rational and approve $$ to be released to contractor.

What'd you do as a rational employee? Time to update your resume??

Ok, ok, I agree with you and I'm not condoning what I'd previously described of what could have happened...

As for the banks, I don't think you need to give them all the background of your problems... Most likely, they don't want to know too much (the bank staff handling the loan also has quotas to meet), just whether you have the ability to pay back. All they need is the guarantor's signature + some personal documents to check that you have the ability to pay in case of default...

[edragon]

Today threads on King's Men capture the Greed and Fear and turn valuebuddies into tikam tikam. (ok, I might be wrong, some says dollar averaging.)

At one point in time ( 7:50am ), was tempted to tikam tikam but decided that there are too many excellent counter to bet my money.

9:35am - no panic selling confirmed my decision. Ignore this stock for today. Wait till newspaper report and then and decide again next week.

<not vested>

Someone once wrote:-

When it comes to stocks most investors make the pretense of trying to own value when in fact all they care about is the price of the security.

Stock guys can give you a very nice story about growth and valuation but at the first sign of price declines they will bail.

[Drizzt]

One way would be for Contractor B to get a Bank Loan. No collateral, how? Possibly, 2 of the Kingsmen employees acted as their guarantor... ie. 'Personal Guarantee' provided...

My view:

IMO a rational employee would not likely put up his personal networth to be a bank guarantor for a subcontractor of his employer, especially one that is small and without much assets, especially when the reason is as innocent as to help a subcontractor manage cashflow and benefit accrues to his employer/subcontractor and not himself.

I am also dubious of the kind of bank that would accept such arrangement.

Let me dig into my imagination for a possible scenario...

So, what if this rational employee happens to be the Project Manager who's managing a project run by the contractor and has to meet a tight schedule? Contractor is unable to expedite as no cash to pay sub-con who refuses to work unless they're paid? Employee + Contractor had already pushed Kingsmen for payments but MGMT continue to drag their feet as they have 101 other things of higher priority to do? How?? How?? Exhibition going to start soon and work only half completed??

Looks like project is doomed for failure unless the MGMT turns rational and approve $$ to be released to contractor.

What'd you do as a rational employee? Time to update your resume??

Ok, ok, I agree with you and I'm not condoning what I'd previously described of what could have happened...

As for the banks, I don't think you need to give them all the background of your problems... Most likely, they don't want to know too much (the bank staff handling the loan also has quotas to meet), just whether you have the ability to pay back. All they need is the guarantor's signature + some personal documents to check that you have the ability to pay in case of default...

Project Management 101!

[cif5000]

Anyway, do take note that the Letter to MOF was sent out last Friday (11 Jan 2013), and the Company requested for a trading halt on Monday (14 Jan 2013) to make an announcement. It took them longer to draft the announcement and had to extend the trading halt (16 Jan 2013). Out came with a 3-page mellowed announcement (18 Jan 2013) which should at least have the word "fraud" in its title. So you really have to wonder why it has to take so long to draft that 3-page announcement. For now, I think the management has succeeded.

"The Board is of the view that there is sufficient information in the market for trading in the Company’s securities to continue. The Company will expeditiously make further announcements on the above matters as and when there are material developments thereon."

It is clear that the 3-page announcement has undergone numerous "revision" such that only the minimum information, however jumble up, is released for the stock to continue trading. When CAD starts their investigation, you better hope the stock doesn't go into prolong suspension. If that happens, shareholders can look forward to holding this baby long term. Like WB, buy on the assumption that they shut the market down the next day and not reopen it for five years.

[specuvestor]

One way would be for Contractor B to get a Bank Loan. No collateral, how? Possibly, 2 of the Kingsmen employees acted as their guarantor... ie. 'Personal Guarantee' provided...

My view:

IMO a rational employee would not likely put up his personal networth to be a bank guarantor for a subcontractor of his employer, especially one that is small and without much assets, especially when the reason is as innocent as to help a subcontractor manage cashflow and benefit accrues to his employer/subcontractor and not himself.

I am also dubious of the kind of bank that would accept such arrangement.

Let me dig into my imagination for a possible scenario...

So, what if this rational employee happens to be the Project Manager who's managing a project run by the contractor and has to meet a tight schedule? Contractor is unable to expedite as no cash to pay sub-con who refuses to work unless they're paid? Employee + Contractor had already pushed Kingsmen for payments but MGMT continue to drag their feet as they have 101 other things of higher priority to do? How?? How?? Exhibition going to start soon and work only half completed??

Looks like project is doomed for failure unless the MGMT turns rational and approve $$ to be released to contractor.

What'd you do as a rational employee? Time to update your resume??

Ok, ok, I agree with you and I'm not condoning what I'd previously described of what could have happened...

As for the banks, I don't think you need to give them all the background of your problems... Most likely, they don't want to know too much (the bank staff handling the loan also has quotas to meet), just whether you have the ability to pay back. All they need is the guarantor's signature + some personal documents to check that you have the ability to pay in case of default...

Firstly no rationale employee will put his net worth at stake, unless he is very naive or he has a stake ie business unit owner for eg, or maybe even with vested interest in the subcontractor, indirectly through relatives perhaps. Secondly it is not just any Tom dick Harry that can be a guarantor for such project. Technically the CEO is also an employee. I'm not saying the CEO is involved but it is probably a person of substance in the company

[AlphaQuant]

The BT carries an article on this, with the executive chairman/one of the founders saying

"The two employees thought they were under pressure to tell accounts they have done the job within budget. But no money went into the two employees' pockets. They did not cheat the company's money"

http://www.businesstimes.com.sg/premium/...s-20130119

i don't have the full link though, but this prob suggests why the 2 blokes were not fired (unlike the Beijing case) since they were not really cheating money (as in pocketting the cash), but understating the costs, and then finding extra ways to pay off Contractor B.

so sounds to me like
a) 4 Beijing workers duplicated claims and really did cheat the firm of RMB146,835 (approximately S$29,000). They were fired (of course!)
b) 2 local employees understated costs to Contractor B (for fear of showing a project overrun) and tried to get extra claims to pay them off. Should they be fired? understating costs and doing something dodgy to pay off the overruns is certainly wrong/not inline with procedures (and i think CAD will find them guilty) but to be honest, i think there are worse offences than that....

the manner of the annoucement is rather rushed i think, which gives me the impression that management was caught unaware. The first paragraph of the annoucement was a direct lift from Chapter 50 of the Company Act (which states that an auditor, upon suspecting fraud or dishonesty, must report to the MOF).

how senior these 2 blokes are is a mystery, but i guess if u need to be scared abt your job over project overruns of $1mio quanta, you cannot be very senior (as in top management).

kudos to the Audit Committee and Ernst&Young for being on the ball though...

[flinger]

I do not know of any company that does not go through multiple revisions before publishing something to the public. It's called " Public Relation" and CIF5000, of all the people you should know that very well. =)

I would actually think that the company is unprofessional if they just wrote something quick and published it without thinking about what the public reaction will be if we just blurted it out.

I think it often is up to the management and the board to decide what is the interest of the company and the shareholders to publish.

If you are really scared that they are hiding something, please by all means go ahead and sell your shares.

That's a choice every shareholder has to make.

Whether its goes one way or another, its your decision and choice to sell or hold.

Anyway, do take note that the Letter to MOF was sent out last Friday (11 Jan 2013), and the Company requested for a trading halt on Monday (14 Jan 2013) to make an announcement. It took them longer to draft the announcement and had to extend the trading halt (16 Jan 2013). Out came with a 3-page mellowed announcement (18 Jan 2013) which should at least have the word "fraud" in its title. So you really have to wonder why it has to take so long to draft that 3-page announcement. For now, I think the management has succeeded.

"The Board is of the view that there is sufficient information in the market for trading in the Company’s securities to continue. The Company will expeditiously make further announcements on the above matters as and when there are material developments thereon."

It is clear that the 3-page announcement has undergone numerous "revision" such that only the minimum information, however jumble up, is released for the stock to continue trading. When CAD starts their investigation, you better hope the stock doesn't go into prolong suspension. If that happens, shareholders can look forward to holding this baby long term. Like WB, buy on the assumption that they shut the market down the next day and not reopen it for five years.

[KopiKat]

Today threads on King's Men capture the Greed and Fear and turn valuebuddies into tikam tikam. (ok, I might be wrong, some says dollar averaging.)

At one point in time ( 7:50am ), was tempted to tikam tikam but decided that there are too many excellent counter to bet my money.

9:35am - no panic selling confirmed my decision. Ignore this stock for today. Wait till newspaper report and then and decide again next week.

<not vested>

Someone once wrote:-

When it comes to stocks most investors make the pretense of trying to own value when in fact all they care about is the price of the security.

Stock guys can give you a very nice story about growth and valuation but at the first sign of price declines they will bail.

It's times like this that we get to know our buddies better... We see how each of us can have different interpretations from the same piece of news.. How risk averse, how decisive, how analytical, how experienced,.. each of us can be.. Ain't it great to have diversity...

No, I don't see it as a case of how more / less of a Value Investor one is, but rather it shows how each of us handles our risk-reward based on our own individual interpretations and temperament.

For eg., in my case, if Kingsmen had been a huge % of my portfolio, I'd likely have reduced my stake as this new unexpected event had created much uncertainty and I'd see it as too high a risk to have too much exposure. If my holding had been only a tiny % of portfolio, I may either sell all if I deem it not to be worth my time or increase my stake depending on how attractive my current alternatives are.

Even my newly acquired stake, I can't guarantee how long I'll be holding as new info may emerge to show that I'd seriously misjudged the situation...

[CityFarmer]

Today threads on King's Men capture the Greed and Fear and turn valuebuddies into tikam tikam. (ok, I might be wrong, some says dollar averaging.)

At one point in time ( 7:50am ), was tempted to tikam tikam but decided that there are too many excellent counter to bet my money.

9:35am - no panic selling confirmed my decision. Ignore this stock for today. Wait till newspaper report and then and decide again next week.

<not vested>

Someone once wrote:-

When it comes to stocks most investors make the pretense of trying to own value when in fact all they care about is the price of the security.

Stock guys can give you a very nice story about growth and valuation but at the first sign of price declines they will bail.

It's times like this that we get to know our buddies better... We see how each of us can have different interpretations from the same piece of news.. How risk averse, how decisive, how analytical, how experienced,.. each of us can be.. Ain't it great to have diversity...

No, I don't see it as a case of how more / less of a Value Investor one is, but rather it shows how each of us handles our risk-reward based on our own individual interpretations and temperament.

For eg., in my case, if Kingsmen had been a huge % of my portfolio, I'd likely have reduced my stake as this new unexpected event had created much uncertainty and I'd see it as too high a risk to have too much exposure. If my holding had been only a tiny % of portfolio, I may either sell all if I deem it not to be worth my time or increase my stake depending on how attractive my current alternatives are.

Even my newly acquired stake, I can't guarantee how long I'll be holding as new info may emerge to show that I'd seriously misjudged the situation...

Different approaches by each individual.

KopiKat following a approach of poker player, never know his next move unless a new card unfolded.

I am more and less the same approach, but more like a mahjong player which next move highly dependent on each new tile discarded.

My apologies if it sound more like a casino, rather than a value investor forum

[mrEngineer]

Seriously I wonder why no one questioned the impact of the fraud to Kingsmen reputation? Remember Kingsmen is in an extremely competitive industry and if fraud is in the books can it still continue some of its business? For eg, will Singapore F1 still engage Kingsmen in Sept? Such large projects needs certainty during the critical period of the event.

Not vested.