Oceanus Group

[d.o.g.]

Shows Corporate Governance issues ?
Sample Check: Any IDs same as with China Sky?

Funny you should ask, because I also noticed that Mr Lai Seng Kwoon is an independent director at Oceanus.

Lai Seng Kwoon, of course, is the man with lots of S-chip directorship experience:

Celestial Nutrifoods
China Milk
China Sky
China Sun Bio-Chem
Oriental Century

[wsreader]

pianist-page 15 of 56 of the 2010 AR stated that the caged abalone were in "50 farms strategically located in Fujian and Guangdong provinces". I could not find further location details.

KopiKat-you are right, the trip may not seems desirable after all. I will withdraw my interest. Anyway, with my presbyopia, I may mistaken sea rocks as abalone shells.

The word "mortality" was used to described the situation. If the abalones were actually missing, then the company announcement was misleading. Will continue to monitor this curious case of the mortal abalones, although I am not vested.

[Qiaofeng]

Shows Corporate Governance issues ?
Sample Check: Any IDs same as with China Sky?

Funny you should ask, because I also noticed that Mr Lai Seng Kwoon is an independent director at Oceanus.

Lai Seng Kwoon, of course, is the man with lots of S-chip directorship experience:

Celestial Nutrifoods
China Milk
China Sky
China Sun Bio-Chem
Oriental Century

Any idea what the Chairman of the Audit Committee and the AC do?
I mean do they do any of the things mentioned in the Annual Report?
Does the AC oversee the external auditors?
Any idea if his firm provided any accounting related services?

Principle 12: The Board should ensure that the Management maintains a sound system of internal
controls to safeguard the shareholders’ investments and the company’s assets.
The Audit Committee has ultimate responsibility for the systems of internal control maintained and set in place by the Company.
The systems are intended to provide reasonable assurance, but not an absolute guarantee, against material financial
misstatement of loss, and regarding the safeguarding of investments and assets, reliability of financial information, compliance
with appropriate legislation, regulations and best practices, and the identification of business risks.

[d.o.g.]

Any idea what the Chairman of the Audit Committee do?
I mean do they do any of the things mentioned in the Annual Report?
Does the AC oversee the external auditors?
Any idea his firm provided any accounting related services?

The job of the Audit Committee is described in pages 35-36 of the 2010 Annual Report. As to whether the job was actually done, that is a different question and one that remains unanswered.

Page 39 (Interested Person Transactions) of the 2010 Annual Report mentions that $429k was paid for internal audit services, to "firms which a director has an interest in".

Apart from Lai Seng Kwoon, none of the other directors is described as having an interest in an audit firm. This strongly suggests that SK Lai & Co was again involved.

I wonder whether Mr Lai is able to truly fulfill his duty to the shareholders when he is both a director and a supplier of services. Wouldn't there be a conflict of interest? All the directors were collectively paid $295k for 2010, assuming that only the 4 non-executive directors were paid, then each got $74k on average. SK Lai & Co was paid $429k. Clearly Mr Lai's interest would lie with the $429k he was being paid for internal audit, rather than the $74k he got as a director.

Certainly, as far as internal audit is concerned, the firm that provided this service failed miserably, since it did not ensure that the company was following procedures to match the abalones recorded on the balance sheet with the abalones that were physically present.

[Qiaofeng]

Any idea what the Chairman of the Audit Committee do?
I mean do they do any of the things mentioned in the Annual Report?
Does the AC oversee the external auditors?
Any idea his firm provided any accounting related services?

The job of the Audit Committee is described in pages 35-36 of the 2010 Annual Report. As to whether the job was actually done, that is a different question and one that remains unanswered.

Page 39 (Interested Person Transactions) of the 2010 Annual Report mentions that $429k was paid for internal audit services, to "firms which a director has an interest in".

Apart from Lai Seng Kwoon, none of the other directors is described as having an interest in an audit firm. This strongly suggests that SK Lai & Co was again involved.

I wonder whether Mr Lai is able to truly fulfill his duty to the shareholders when he is both a director and a supplier of services. Wouldn't there be a conflict of interest? All the directors were collectively paid $295k for 2010, assuming that only the 4 non-executive directors were paid, then each got $74k on average. SK Lai & Co was paid $429k. Clearly Mr Lai's interest would lie with the $429k he was being paid for internal audit, rather than the $74k he got as a director.

Certainly, as far as internal audit is concerned, the firm that provided this service failed miserably, since it did not ensure that the company was following procedures to match the abalones recorded on the balance sheet with the abalones that were physically present.

If again there is another conflict of interest, here, then he has "serially" abused the system w/o any grave consequences.
This points to a huge gap in the Corporate Governance of not just the companies involved themselves but of the scrutiny and oversight they are subjected to-----i.e. the supervisory and regulatory framework of SGX.
I hope, as I have posted before--- that SGX/MAS investigate the whole thread/link of listcos associated with some of these IDs.

[setan]

Hi All,

With so many failures in S chips, are there any tell tale sign in their financial reporting? Any experienced and experts could share with all in this forum to learn? Thanks.

setan

---

Hi All,

With so many failures in S chips, are there any tell tale sign in their financial reporting? Any experienced and experts could share with all in this forum to learn? Thanks.

setan

[d.o.g.]

Lai Seng Kwoon was/is Chairman of the Audit Committee for:

Celestial Nutrifoods
China Milk
China Sun Bio-Chem
China Sky Chemical Fibre
Oceanus
Oriental Century

This guy is really scary.

IMHO he ranks down there with Lim Seck Yeow for the "kiss of death".

With so many failures in S chips, are there any tell tale sign in their financial reporting?

There is no single red flag. But I have found issues in many places, such as:

abnormally high margins
abnormally high trade receivables
share placements at low prices despite strong balance sheets
borrowing money despite large cash balances
insider sales at low prices
low dividend payout ratios
abnormal output/worker
abnormal wages/worker
high utilisation despite industry overcapacity
high capex despite low utilisation

I am sure there are many others, but these are what come to mind right now.

[Qiaofeng]

Lai Seng Kwoon was/is Chairman of the Audit Committee for:

Celestial Nutrifoods
China Milk
China Sun Bio-Chem
China Sky Chemical Fibre
Oceanus
Oriental Century


This guy is really scary.

IMHO he ranks down there with Lim Seck Yeow for the "kiss of death".

They profit(ed) and thrive(d) in the SGX ecosystem......

[hmwes]

Some of the other tell tale signs would include:

- (i) A dodgy group structure such as having many companies being incorporated in the Cayman Islands (iii) dodgy business relationships like the switch to or use of little known valuation firms, banks, auditors, lawyers

- Key management personnel start resigning for personal reasons even though the company is doing well and they are due for big paydays

Hope this help and look forward to comments from the more experienced.

[Qiaofeng]

Oceanus reply to SGX Queries.
For those following the saga.