Sunday, 29 April 2012
HuaBao made an official announcement to the HKEX. The typical legal kind of response that one can expect: the allegations of Anonymous Analytics (AA) are "incorrect and misleading" and the company will prepare a clarification. I hope it won't take too much time since many allegations were well known.
The company has dispatched delegates to verify financial information of some subsidiaries for the year ending December 31, 2010. Rather surprisingly, one would have guessed that that information was readily available in the headquarter.
Also there is mentioning of currency translations, different accounting standards and different dates for closing of the book year. This is all standard though and every accountant should know how to deal with that, it can't explain the allegations from AA.
More information about this case can be found here:
This is Chu Lam Yiu, major shareholder and Chairman of HuaBao, "Queen of Cashout", a self-made billionaire who founded the company a decade ago:
The share of HuaBao is still suspended.
Both the blogs if Buyersstrike and Bronte stress the importance of which parties are involved in listed companies, for instance which promoter brought the company to the market, who is the accountant, who are the directors, who are the major shareholders, etc. Bronte calls it the most important factor in his analysis: Who is associated with the company? Cheating people do not suddenly change overnight.
The Securities Commission has asked journalists, bloggers, "influencers" etc to publish about corporate governance matters. A database where one can trace the above information in a simple way would be very helpful, and added to this a database with offenders (both companies and persons). The result would be more exposure and less damage from unscrupulous persons, and thus a more healthy share market. Huge amounts of Malaysian IPO's have failed to live up to the high expectations from their glossy brochures. Aggregated information who was involved with the many failed ones would be very helpful.
If David Webb can run this kind of database all by himself and one assistant for the much larger share market in Hong Kong, then surely it should be easy to setup a similar service in Malaysia?