chinman.com
Public Zone 公開區 => Bookwyrm 書蟲天地 => Topic started by: chin on 01 November 2009, 02:50:45
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Just to book mark it now.
I am going to read the whole darn thing one of these days... both the 477 page report (attached) and the 6100+ pages of exhibits.
http://www.sec.gov/news/studies/2009/oig-509/oig-509_exhibits.htm
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Last year I read "No One Would Listen: A True Financial Thriller" by Harry Markopolos.
It's the story how he was pushed by management to replicate the Madoff strategy but couldn't, thus leading him to suspect the Madoff returns were fake, and the subsequent story of how frustrated he got getting no where complaining to SEC.
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Anyway, this is not related to Madoff but financial market frauds in general.
I read in the news few days ago about this guy who find those fraudulent Chinese concept companies listed in the North American markets. I am book marking it here and attached some key reports. Should be some good reading, but don't forget that these are from a short-seller.
http://www.muddywatersresearch.com/
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While on the subject of potential financial market frauds, I have written down in late 2009 the following after reading Chaoda Modern (hk.682) 2009 annual report. I have a friend who is now a very prominent analyst with HSBC. When I asked her about this stock in Dec 2009, she told me that she also think this company is up to something, and she did not want to cover this company.
The share price dropped substantially after a Next Magazine article published a negative story last week.
From the 2009 annual report:
Revenue: 6.13 billion RMB
Gross Profit: 4.15 billion
Profit Attributable to Shareholders: 3.99 billion
How come the company has been able to maintain such super high margin for so long!?!?!?
Return on capital of 16.76 billion about 23.8% !!!
PE only at 3.56x !!! Other people are suspicious of the quality of the reported earnings.
Too good to be true???
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After spending the last two hours reading one of the reports, I just realized I was once a large shareholder in a HK listed company connected to the alleged fraud! And not only that, we just had a round of golf with the founder of that company, without me realize this fact, until now.
Small world!
... and no, I don't know any of the persons being accused in the report above.
My shareholdings in that company lasted less than 2 years, sold virtually all shares in 2002. But I know many of the directors between 2002 to 2010. Including one CEO who in my view did not even qualify to run a 10-person software house, let alone a public company. He was a puppet, no doubt in my mind. The current CFO was an apprentice in 2000 and a hard working woman.
Man, don't I have many stories to tell...
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hahaha....The most ineffective workers will systematically move to the place where they can do the least damage : Management.