Sunday 2nd June 2019
Dear Reader,
Before today's article, let me just say that the Extradition Bill is the gravest threat to HK's autonomy since the proposed Article 23 national security legislation of 2003. Please sign the petition, and march to defend HK's System next Sunday 9th June, 3pm from Causeway Bay. See you there. Only a huge turn-out will shame the pro-government majority of legislators into withdrawing support for the bill, which they will otherwise pass the following week.
NEW ARTICLE
The
Trump Dump: war-gaming the next move against China
The US
Administration has so far focused entirely on the trade account, but when the
potential for tariffs is exhausted, if not sooner, Trump may start to wonder why
US funds have hundreds of billions of dollars invested in stocks and bonds of
Chinese state-backed companies, and use OFAC powers to order them to
divest. (2-Jun-2019)
IN OTHER NEWS
UK-Canada joint statement on Extradition Bill
UK Government, 30-May-2019
SFC fines
China Merchants Securities HK$27m for sponsor failures
SFC, 27-May-2019
As we predicted in March
when UBS was fined but one of its clients was not named, this relates to the IPO
of China Metal Recycling, listed in 2009 and ordered in 2015 to be wound up. The
IPO was jointly sponsored by UBS and China Merchants Securities.
HKEX (0388) v Frank Shi Huaifang
HK Court of
First Instance, 27-May-2019
Ex-CSRC head under investigation | CCDI
notice
RTHK, 20-May-2019
He was
formerly head of Agricultural Bank of China Ltd (1288).
Hong Kong sees first 'Enigma' stock fraud charge of many to come
TheStreet.com, 17-May-2019
Censure of Weiqiao Textile (2698) and certain Executive Directors
SEHK, 17-May-2019
For failing to disclose
loans by the company to its unlisted parent and seek independent shareholders'
approval. When approval was eventually sought, it was rejected and the loans
were repaid.
Catherine
Leung Kar Cheung, ex-J.P. Morgan MD, charged with bribing chairman of logistics
company for IPO
ICAC, 16-May-2019
The first HK charge in the famous "Sons & Daughters" program of J,P. Morgan. Ms
Leung is now MD of hedge fund manager Serica Partners Asia Ltd, of which her
husband Ivan Lee Chin Leung is founder and CIO.
SFC bans
Wang Can, ex-China Galaxy, for 30 months, fines him HK$7,800
SFC, 16-May-2019
He was privy to information
on a transaction by Linmark (now Daohe, 0915) and bought 40,000 shares, on which
he made a profit of $7,800 ($0.195 per share) when he sold them on 5-Dec-2014, 2
days after the transaction was announced. The stock price ranged from $0.68-0.76
that day. It is unclear why he was not charged with Insider Dealing.
Gransing
Securities chair Rowena Oei Hong Eng suspended for 8 months
SFC, 16-May-2019
Gransing is one of the
brokerages in what we call the "Enigma Network", having acted as placing agent
for many of its listed companies. The firm was co-founded by Ms Oei and her
husband Gerald Que Bon Tan. It is 17.52% owned by China New Economy Fund (0080),
a network company. The CNEF accounts state that Gransing Financial Group Ltd
(including the brokerage) had an unaudited loss of HK$20.7m in 2018. Ms Oei
admitted that she dishonestly crossed orders with an unnamed friend at another
firm in 2 stocks (not in the network).
Roy Cho
Kwai Chee charged with conspiracy to defraud Convoy (1019) | SFC
announcement
ICAC, 16-May-2019
2
years and 1 day after we published the "Enigma Network" report, the first charge
is brought, relating to a relatively small and previously-unannounced
acquisition by Convoy. 55% of the target was owned by Mr Cho. The ICAC alleges
that he owned "50% shareholdings" in Convoy. He was not a disclosed shareholder,
so to prove this, they will need to show that he was pulling the strings of
numerous listed companies in the network which held the stock. Two
co-conspirators are unnamed. We wait to see the rest of the iceberg.
And much more besides...
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David M. Webb
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