ECGI Holdings Inc (ECGI)

[Potse]

RichieBoy...debt, SUIP management, connections.....

"I note from the filing SUIP is (albeit slowly) paying down debt and there is this interesting tidbit...

Supplement disclosure of non cash investing and financing activities:

Reduction of note in connection with share recission

$500,000

My hunch is either he is looking to do exploration OR! he is prettying up the shell to flog it. Hard to tell yet."

SUIP management has been pretty shareholder friendly from the perspective of a shell investor, IMO. Debt and expenses have been kept relatively low up to this point. The only significant amount of debt the shell had in its history was a $200K loan (convertible at 10 cents per share) from the CEO when the shell was spun off. The CEO decided not to make the conversion, which helped maintain the low share structure.

That "$500,000" you referenced was the $500K convertible investment/note that SUIP purchased a couple of years ago.

For historical/background purposes: Back in 2008, the CEO invested $1.5M and 2 other people each invested $750K (total of $3M) in SUIP. Part of the new business plan was for SUIP to make investments in other companies. The first investment was the purchase of a $500K convertible note in an electronics-related company. Unfortunately the timing of the investment turned out to be particularly bad -- about 3 months or so before the global credit markets collapsed.

This is a snippet of comments I had about this from post #36.....

I was actually somewhat impressed by an action SUIP took last year to restore shareholder value to the shell after SUIP management basically got blindsided by the events that transpired surrounding SJEL (the company that it purchased a $500K convertible note from). That $500K came from the $3 million that the CEO and his associates invested in SUIP in early 2008.

I don't have the time/energy to go back through SJEL's filings but from what I recall just a few months after SUIP purchased that note a large international financial institution unexpectedly pulled some loan or line of credit from SJEL. This created an extremely serious financial situation for SJEL almost overnight, and it potentially could have resulted in SUIP shareholders losing that $500K.

SUIP's management did something you rarely see. The CEO basically took personal responsibility for that situation. The CEO took ownership of that note, and then completely restored SUIP to its original shell condition prior to their $3 million investment. Unless SJEL has recovered financially from that incident, it is entirely possible that SUIP's CEO may have taken a personal $500K hit. And thanks to his efforts to insulate other shareholders, SUIP shareholders managed to emerge from this unscathed.

Part of the reason why I accumulated a large position in SUIP goes beyond its attractive valuation and management's handling of a difficult situation. That $3M investment and attempt at starting a new business direction was a little bit of an eyebrow raiser for me because, IMO, it showed that management may have some pretty interesting connections.

If you look through SUIP's filings you will notice that one of the individuals who participated in that $3M investment was "Xuding Jiao". I'm fairly confident that this person is in fact "Jiao Xuding", who is Chairman/Founder of Copower Enterprise Group (involved in financing/investments and oilfield services in China), and Chairman of SCP Oilfield Services.

He is a picture of Jiao Xuding last year at a conference in Europe, discussing natural resources in China.....

http://www.flickr.com/photos/horasis/5224077378/