Fair to Say Most PRC Companies Cannot be Trusted?

[makapaaa]

<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published March 14, 2009

</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Oriental Scandal
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Raffles Education shares defy shock
Stock rises despite accounting scandal in 30 per cent owned Oriental Century

By OH BOON PING
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SHARES of Raffles Education appeared little affected by the accounting scandal that hit its associate Oriental Century Ltd.

Yesterday, the stock price went to a day high of 38 cents before closing at 36 cents - up from 34 cents a day earlier. Some 38.75 million shares changed hands.
The price rally came despite Oriental Century saying on Thursday that its sales and cash balances could be inflated over several years. Oriental's CEO Wang Yuean, who confessed to the alleged fraud, has since resigned.
In the worst-case scenario that Oriental Century ceases to be a going concern, Raffles Education may need to fully write off its entire investment of $34.6 million or 1.5 cents per share. This will reduce its net book value from 16.46 cents per share as at Dec 31, 2008 to 14.96 cents per share.
Meanwhile, a number of analysts remain upbeat on Raffles with DBS Vickers calling a 'buy' on the stock at a target price of 78 cents.
Its analyst Andy Sim noted that Raffles maintained 'that its own operations are still robust' and except for Oriental, the group retains management control in its recently acquired entities such as Oriental University City (OUC), Shanghai Zhongfa and Tianjin Boustead.
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</TD></TR></TBODY></TABLE>He believed that 'the current situation is confined to ORIC (Oriental) and the market has priced that in. Management has so far delivered growth, and valuation is at a significant discount to peers, trading at an average price-earnings of of 22 times'.
Credit Suisse, which issued an outperform, said that Oriental's contribution of 2.9 per cent of Raffles' forecast FY09 earnings appears negligible.
It believes that Raffles' management perhaps has plans to realise value from Oriental's China-based franchise.
However, CLSA which recommended a 'sell', pointed out that the latest saga reflects the risks of acquiring schools in China, 'where Raffles has made five acquisitions over the past two years'.
'We maintain our negative outlook on Raffles and expect 18 per cent profit contraction in FY10. Without new acquisitions, FY10 will be the first year that the company's growth will only be driven by organic opportunities.'
Analyst Caroline Maes also projects a 2 per cent drop in the company's student body as fewer students can afford to pay up to US$10,000 per year for its programmes. 'Growth at OUC will be limited in the next few years as the new schools will take two to three years to break even and the company has lost its profit guarantees.' Citigroup, which issued a 'hold', changed Raffles' risk rating to 'speculative' from 'high' and lowered its target price to 40 cents.

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[bfxblog]

This is the kind of money i got from buying shares of PRC companies!

 

[makapaaa]

<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published March 14, 2009

</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Trading suspension triggers FibreChem loan default

By LYNETTE KHOO
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TROUBLED firm FibreChem Technologies has announced a default on a US$35 million facility.

'The event of default was by reason of the suspension of trading in the company's shares,' it said.
The US$35 million facility agreement dated Aug 18, 2006, was entered in between the company and a consortium of local and international banks.
Under the facility agreement, the banks offered the group a term loan facility to refinance the existing indebtedness of the group or financing the general corporate funding requirements of the group.
But due to the default, the total commitments under the facility agreement are cancelled and the term loan, together with accrued interest, is immediately due and payable.
The company said that it was notified that the outstanding principal amount of the term loan is US$26.25 million and accrued interest as at March 12 was US$115,581.78.
FibreChem had earlier disclosed on Feb 25 that its auditors Ernst & Young could not finalise an audit of its trade receivables and cash balances for the year ended Dec 31, 2008.
Trading of its shares has been suspended since.
It has also appointed nTan Corporate Advisory as an independent investigator and financial adviser to look into the matter and advise on measures to keep the business going.
Its executive chairman and CEO, James Zhang, has resigned, but offered to cooperate fully with the board.
FibreChem also set up an independent working committee, comprising non-executive directors to oversee the investigation and business continuity.
As the investigations are underway, the group has applied for an extension of time with SGX to report its financial statements for the year ended Dec 31, 2008. It was granted a three-month extension to do so by May 31.

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[makapaaa]

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>S-chip troubles: Put in place safeguards and deterrents
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THERE has been much talk about having measures to safeguard the interests of retail investors when it comes to the selling of investment products by financial institutions. However, there has been no mention about the trading of S-chips on the board of the Singapore Stock Exchange (SGX).

Recently, there has been a spate of bad news about the state of several S-chips listed here. These have ranged from the forced selling of major shareholders' shares under margin financing, management disappearing and accounting irregularities to resignation of an entire board of independent directors and, more recently, significant overstatement of cash balances and over-inflated sales.
Needless to say, the share prices of these companies suffer a meltdown, consequently affecting a large segment of the investing public.
I would like to ask the relevant authorities, including SGX, the Monetary Authority of Singapore and the Commercial Affairs Department, what safeguards would be introduced to reduce the frequency of such incidents from happening and also whether any action would be taken by the authorities against the perpetrators of such incidents.
Otherwise, major shareholders or management would not bat an eyelid in cooking their accounts books to further their 'interests', knowing that they can get away scot-free if things turn sour.
I hope action would be taken so that a clear message can be sent out as a deterrent for anyone who might start to have any ideas about listing their empty shell company on SGX. If not, it would appear that it is the responsibility of only retail investors to avoid such rogue companies and not the SGX's responsibility to list only credible companies. Steven Lim Ngian Ern

U trying to make AssGX lose $ ah? What's your ulterior motive? *chey*​