China Minzhong Food Corporation

[CityFarmer]

To facilitate the discussion, I post an article on SIAS and short-sellers. I highlighted few points for consideration...

SIAS calls on regulators to punish short sellers

SINGAPORE — The Securities Investors Association Singapore (SIAS) yesterday called on regulators to look into tightening short-selling rules, after two recent “reckless, unfounded assaults” on Singapore-listed companies.

“We call on the Singapore Exchange and Monetary Authority of Singapore to look into tightening short-selling rules to prevent and punish these short sellers ... The heavy weight of the law must be felt by these mischievous perpetrators,” said SIAS President and Chief Executive David Gerald.

The comments come after China Minzhong Food was last week accused of accounting irregularities by Glaucus Research, causing half of the S-chip’s market value to be wiped out soon after the report.

The SIAS said yesterday that it has had meetings with China Minzhong and is satisfied the company has “vindicated itself”.

The Fujian-based vegetable producer has since recovered losses suffered on the day of the Glaucus attack, after the S-chip’s largest shareholder, Indonesia’s Indofood Sukses Makmur, launched a takeover for the company valued at S$734 million.

China Minzhong announced yesterday that Indofood has increased its stake in the company to more than 50 per cent, making its earlier offer unconditional.

The China Minzhong incident is reminiscent of another attack by Muddy Waters on commodities firm Olam International last year. Olam denied the allegations and had the support of investment giant Temasek Holdings, which increased its stake in the company.

Mr Gerald said: “Two of our SGX-listed companies have already come under attack and many investors have been hurt by these short sellers. How many more of such reckless, unfounded assaults on honest companies does the Singapore market need to see before such unethical practices are stopped?” LEE YEN NEE

http://www.todayonline.com/business/sias...rt-sellers

[KopiKat]

I had thought if we had these 2 high profile short-seller cases much earlier to "jolt" the complacency of retail investors, less will be hurt:

http://singaporemanofleisure.blogspot.sg...-help.html


After reading KopiKat's story, I am completely wrong

1. People have short memory.

2. I am invincible; cancer only happens to others.

3. If smoking is bad, govt would have banned them oredi.

4. See? That famous fund manager also smoked what! Eh? What brand he smokes? Must be good! I follow.

5. If surprise surprise got cancer must complain to convenience store (underwriter) and govt (SGX)!!!

Don't they know smoking is bad for our health?

It'd appear that for many, real lessons are only really learnt when there's real pain (pardon my using so many 'real' to make the point). In the 2 high profile cases so far, the "pain" was only temporary. In fact, some may have even learnt the wrong lessons... and this may lead to costlier real lessons down the road... I hope not...

[sgd]

On the topic of smoking.

I used to smoke for many years too, then I quit coming 7 years already. Frankly I still like the smell of fresh tobbaco or the pungent "tobbaco breath" while talking to someone who just had a ciggie but no matter how much I like it I never get the urge anymore to pick up again.

If anybody in this forum looking for a way out to quit can try using zyban bupropion. I used that on recommendation from a friend who tried. There are some side effects using it. That said I recognize that smoking is a lifestyle choice and a free choice that everybody is entitled to make or not make and should be respected. If anybody trying to coerce their friend or partner to use this method to quit smoking better don't bother. If a person is coerced into or unwilling to quit no amount of medication or persuasion is going to make them stop and if he does it's only for a while and will pick up again and will be even heavier smoker than before.

I was a determined smoker before I didn't give a s*** about anybody eating their breakfast at coffee shop, they stare at me I will purposely blow smoke in their direction or how loud the message in the anti-smoking campaign or how many little girls wanted me to exchange my pack of ciggies for their candy the more they wanted me to stop the more I became determined to carry on my habit. But I quit smoking after meeting another good friend also a heavy smoker and hearing how he related seeing his father a 40+yr 4 packet a day smoker ended in hospital hooked up to oxygen tank breathing apparatus the sound he made when breathing was like darth vader which scared us out of our wits enough to want to quit smoking willingly.

Health: It's a quite myth that your health will improve after you quit smoking, if you work work work and no time for physical exercise means you lead a sedentary lifestyle. Nicotine actually helps to boost your metabolism when you are smoking keeping your appetite down but when you quit that metabolism is going to crash thats why you see a lot of people pile on the weight after they quit smoking. Good idea to start going to gym even before you put down that pack.

Lastly once you smoke even casually there is a very high chance cancer cells will develop in the lungs even after you quit for many decades it will still be there and will come and haunt you later when you are old. The best way to avoid this is don't even touch it.

moving off topic already -

[Jared Seah]

Good karma never off topic

[d.o.g.]

“We call on the Singapore Exchange and Monetary Authority of Singapore to look into tightening short-selling rules to prevent and punish these short sellers ... The heavy weight of the law must be felt by these mischievous perpetrators,” said SIAS President and Chief Executive David Gerald.

Here we again run into jurisdiction issues. If China Minzhong was issuing fake accounts, no Singapore law can reach them. If Glaucus was making false claims, no Singapore law can reach them. In a cynical way, things are fair.

Mr Gerald said: “Two of our SGX-listed companies have already come under attack and many investors have been hurt by these short sellers. How many more of such reckless, unfounded assaults on honest companies does the Singapore market need to see before such unethical practices are stopped?”

I think Mr Gerald might have missed a few edits on his quote. Here's the version that I think should have been quoted:

"At least 25 SGX-listed Chinese companies have had accounting scandals, corporate governance issues or sudden business collapses, and many investors have been hurt by these promoters. How many more of such reckless, unfounded assaults on honest investors does the Singapore market need to see before such unethical practices are stopped?"

Before SIAS talks about short-sellers, it needs to fully address the S-chip issue first. More investor money has been permanently lost due to S-chips liquidating at zero, defaulting on their convertible bonds etc than has been temporarily lost due to short-seller reports.

As usual, YMMV.

[Ben]

However, even as he happily made his way home, doubts started to appear in his head… “The doctors must have made a wrong diagnosis… there must have been no cancer cells in the first place… this must be a cover up!”, he thought to himself. “There’s no way I could have gotten cancer… my superior genes and healthy lifestyle of food and exercise would have guaranteed that…”, he muttered to himself. “In fact, I don’t even really believe the link between Smoking and Cancer!”, he convinced himself. Even as he thought about the whole incident and got angrier and angrier…. he headed towards the nearest convenience shop to buy himself… a pack of cigarette…

On the way to the convenience shop, he heard a shout, "Hey, Ah boy!" from behind. He turned back and saw his 80 years old uncle was waving at him with a lighted cigarette between his fingers.
"Hi Uncle, where are you going?"
"Going to the convenience store to top up my cigarettes."
"Uncle, after smoking for so many years, you still look healthy!"
"Ya lor, I have been smoking since 15 years old, still as fit as a fiddle."

Hearing that, the smoker was totally convinced. Uncle and nephew went happily together to convenience store to buy the premium minted extra strong ciggies.

As both uncle and cousin came out of the convenience shop, each happily holding a pack of their favourite cigarette, they proceed to the nearby coffee shop for a catch-up session. It was lunch time and the place was pretty occupied. After scanning the area for a moment, both men decided to approach a table somewhere in the middle of the coffee shop where two women were seated.

The man approached the two women and asked permission to share table with them, which was gladly granted.

As they were seated down and ordered their coffee, the man started to recount his near death encounter to his uncle. He concluded that the doctors must have made a mistake as it is impossible for him to have cancer. His uncle echoed:

“Ah boy, I tell you, all doctors are like that. When they can’t find a reason, they blame it on cigarettes. It is very simple, right? Then they tell you don’t do this and don’t do that. Like that life got meaning or not? Look at me, I have been smoking for so many years, I am still here!”

After saying these, his uncle opened his pack of cigarette and took out one stick and offered another to the man. Both men lights up and took a deep puff and exhaled, with great satisfaction shown over their face. It quickly follows by another deep puff.

The two women sharing the table with them started to fan their face with their hand, trying to wave the smoke away from them. When this proved ineffective, one of the women speak up:

“Excuse me, this is a non-smoking section. Please do not smoke here”

The man and his uncle looks at the woman for a while, and the man replied:

“Can’t you see that the smoking section is fully occupied? Beside, some non-smokers also sit at the non-smoking section, taking our seats, so what can we do?

His uncle quickly add on:

“And we are not the only one doing this, there are also people smoking in non-smoking section, why don't you tell them to stop”

The two women knew that it was beyond their ability to control the situation and so they leave immediately, even though their lunches were only half consumed. “So unlucky, wasted my money!” One of the women was heard saying as she leaves.

The man and his uncle ignore them and continue smoking away.

At this moment, two NEA officers suddenly appear by their side, startling the two smokers. The NEA officers flash their badges to them and tell them in an authoritarian manner that they have breached the Smoking Act and will be fine. If they wish to challenge the fine, they must go before the court and present their case. The man and his uncle try to plead for a second chance, but it was futile.

** Sorry to continue the off-topic, but I think this is one off-topic story worth to continue.

[specuvestor]

Nice story IMHO many times we need to go back and analyse rationally why we make money or lose money, so that we can develop certain principles going forward. Everyone is a stock market genius in a bull market.

Same event people can have different interpretation if they analyse wrongly. The smoker either analyse correctly and change his way; or continue to think he is right and stumble along. Same can be said for investors.

I had thought if we had these 2 high profile short-seller cases much earlier to "jolt" the complacency of retail investors, less will be hurt:

http://singaporemanofleisure.blogspot.sg...-help.html


After reading KopiKat's story, I am completely wrong

1. People have short memory.

2. I am invincible; cancer only happens to others.

3. If smoking is bad, govt would have banned them oredi.

4. See? That famous fund manager also smoked what! Eh? What brand he smokes? Must be good! I follow.

5. If surprise surprise got cancer must complain to convenience store (underwriter) and govt (SGX)!!!

Don't they know smoking is bad for our health?

It'd appear that for many, real lessons are only really learnt when there's real pain (pardon my using so many 'real' to make the point). In the 2 high profile cases so far, the "pain" was only temporary. In fact, some may have even learnt the wrong lessons... and this may lead to costlier real lessons down the road... I hope not...

I consistently think short selling is very difficult because 1) borrowing fee and inherent leverage cost for some products 2) stock availability: harder to get stock of lousy companies end up shorting proxies which are better companies 3) Stock recall: biggest irony is kenna forced to cover position when the catalyst finally happens so that the owner can sell. 4) Asymmetrical returns as stock can only go maximum zero, but no maximum upside (Short squeeze of Volkswagon is a prime example) 5) inflationary policies are against you unless central banks change their doctrines

Most of the time u win big 10% of the time for short selling which translate to about once a year and once in a decade, depending on your timeframe and reward profile.

But I think reputable short sellers are good because they help us identify lousy companies before it implodes like a pyramid scheme. Problem happens when the short seller is unscrupulous and not reputable because it is much easier to tarnish reputation than to protect and build it. One mistake out of a hundred and you have a hard time explaining it, because the market, and of course people, usually don't give credit for the 99 times you did right. And reputation can be life or death because credit perception depends on it.

中庸之道... as usual

{Singapore regulators called on to punish "unscrupulous" short-sellers

SIAS demands tightening of short-selling rules.

The Securities Investors Assocation (Singapore) said it is "seriously concerned" that the "unscrupulous actions" of certain short sellers have caused the investing public to suffer and challenge the integrity of the Singapore capital market.

"We call on The Singapore Exchange and the Monetary Authority of Singapore to look into tightening short-selling rules to prevent and punish these shortsellers, especially those who stand to gain from their unfounded and unscrupulous acts. Left unchecked, this can have a negative effect on our capital markets development. The heavy weight of the law must be felt by these mischievous perpetrators," it added.

Ridiculous! Might as well say ban short trading completely.

Its like telling the authorities to ban knives because people got injured or killed by knives. At the end of the day its not the action of short selling that is bad. From what i see, all this saga can be avoided if the investors had known better (like indofood). Obviously there is a disconnect between the regulations and way of doing things in china and other countries. Credit to glaucus for exploiting this loophole.

How can SIAS help? For a start, they can conduct a seminar on this episode and educate the retail investors on the existing gap between regulations and business filings in china vs other countries. They can go ahead and charge a fee and i for one, will be very willing to pay up and go listen.

[corydorus]

With this surprise turn of Event, just curious anyone come out worst from it ?

1. People who set auto sell limit would have sell at low price
2. People who "short" with CFD

One lesson to learn is not to mess with Billionaire. They have War Chest to save face !

Cory

[yeokiwi]

Mr Gerald said: “Two of our SGX-listed companies have already come under attack and many investors have been hurt by these short sellers. How many more of such reckless, unfounded assaults on honest companies does the Singapore market need to see before such unethical practices are stopped?”

China Aviation Oil, ACCS, HongXing and Jurong Technologies had been awarded Transparency award by SIAS and many investors had been hurt by investing into these companies. How many more of such useless awards does the Singapore market need to see before such awards are stopped?

[specuvestor]

Mr Gerald said: “Two of our SGX-listed companies have already come under attack and many investors have been hurt by these short sellers. How many more of such reckless, unfounded assaults on honest companies does the Singapore market need to see before such unethical practices are stopped?”

China Aviation Oil, ACCS, HongXing and Jurong Technologies had been awarded Transparency award by SIAS and many investors had been hurt by investing into these companies. How many more of such useless awards does the Singapore market need to see before such awards are stopped?

Agree. SIAS is a sick joke