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Thanks for posting this it proves my point. I am not sure I understand setting up two cameras but not showing any video from it. It does not make sense to me.
When I wrote that, I wasn't sure how much of LPH's sales were to industrial customers, which would likely require much greater deliver volumes than small tank trucks could provide.
If people like yourself think I am not being objective by raising concerns about a non-Mandarin speaking CFO who works part time between this company and another company, and does this based on the other side of the world in Florida,
Here is a question I would like to see answered about GEO.. in their write-up they set up two cameras at Gujiao
As shown in the overview image above, Camera 1 had unobstructed views of the Gujiao Tanker Fueling Station and the Tanker Fueling Entrance. Camera 2 had an unobstructed view of the Weighing Station and a partial view of the Rail Spur
You can view 3 of our time-lapse surveillance videos of LPH's Gujiao Tanker Fueling Station filmed from our Camera 1 at the following links:
I anticipate a "pop" of significance in late January/early February, but have pulled much of my position out of this stock to make more money elsewhere until then.
Last post for today. Just so people understand it isn't just Chinese stocks that are attacked. Here is a post from Barrons about naked short selling which is illegal, draw your own conclusions:
http://online.barrons.com/article/SB50001424053111904184504577518792352585660.html#articleTabs_article%3D1
Naked short selling has long dwelled in the grassy knoll of the equity markets, denounced by crackpots, devotees of penny stocks, and troubled companies eager to divert attention from their failings. In other words, sightings of it often turn out to be bunk.
Despite this, a failed naked-shorting lawsuit lodged against all of the major Wall Street prime brokers, including units of Goldman Sachs Group and Merrill Lynch, by Overstock.com, has raised intriguing issues. The case, filed in California Superior Court in San Francisco in 2007, was summarily dismissed in January on a technicality; the court found that it should have been filed in a different venue. Goldman (ticker: GS) and Merrill, a Bank of America (BAC) subsidiary, want the court to keep all related records and documents sealed, as they now are, while four media outfits—the New York Times (NYT), the Economist, Wenner Media (Rolling Stone's publisher), and Bloomberg—have filed a motion seeking their release. Amid all this, a lawyer for Goldman goofed—attaching to a public filing a sealed legal brief from Overstock's legal team, citing selected documents and e-mails in a manner that casts a very unflattering light on the two Wall Street giants' prime-brokerage operations.
NAKED SHORTING—selling stock that the seller doesn't have and hasn't borrowed, in the hope that its price will quickly fall, letting the seller repurchase it at a lower price and then deliver the stock to the buyer—is generally illegal. Usually, sellers must borrow a stock, or at least determine that they can borrow it, before they can sell it short.
Enlarge Image
George Frey/Bloomberg News
Overstock CEO Patrick Byrne doesn't smile much when the subject of short selling arises.
The accidentally released file, mentioned first in a Rolling Stone blog two months ago, cites only portions, rather than the full texts, of various communications. The selections copiously use the term "fail," as in "fail to deliver" securities—an essential ingredient in naked shorting. They make no mention of any intent to drive down the shares of Overstock (OSTK), an online discount retailer. However, as submitted by Overstock, they contain comments by Goldman and Merrill officials that could be interpreted as acknowledging that they let certain clients and counterparties fail to deliver stock, and indeed lent to short sellers shares that themselves were a product of naked shorting.
Goldman and Merrill deny engaging in naked shorting or violating the securities laws and say that Overstock's characterization of the e-mails distorts their meaning. A Goldman spokesman, in a statement, calls the filing "an advocacy piece written by Overstock's lawyers that contains selective and highly misleading references to a handful of the many documents produced during the discovery process in the litigation. Overstock's argumentative references omit material information and necessary context and are rife with misleading partial quotations and inaccuracies."
Presumably, if the spokesman is correct, the full records related to the case would show that the references to the e-mails are misleading. Why, then, are Goldman and Merrill seeking to seal them? Both contend that they could reveal "trade secrets."
In its suit, Overstock had accused the prime brokers of conducting "a massive, illegal stock-market manipulation scheme" with short sellers to batter its shares. When the sealed filing surfaced, a gloating Overstock CEO Patrick Byrne maintained that it contained "but a sample of the shenanigans at Goldman and Merrill that have turned up over the course of five years and millions of pages of discovery." However, the Overstock filing appears to fall short of proving any scheme. Ironically, it does more to support longstanding complaints by some shorts—a group Byrne detests—that they're often abused by prime brokers, who impose exorbitant borrowing fees for stock, some of which might never actually be borrowed on their behalf.
ORIGINALLY, 11 WALL STREET prime brokers were defendants, but the cases against all but Goldman and Merrill were dropped or settled out of court (Overstock reportedly got $4.4 million in the settlements). In a statement provided to Barron's, Goldman derides the suit as part of Overstock's "longstanding self-described 'jihad' against short sellers, designed to distract attention from its own failure to meet its projected growth and profitability goals and the resulting sharp drop in its stock price during the 2005-2006 period." Indeed, from 2004 to 2007 Overstock usually operated in the red and issued financial statements that subsequently were restated several times.
Prime brokers mainly provide securities-clearing and other services—including locating borrowable shares that can be sold short—to brokerage firms' big customers, often hedge funds. But Overstock's brief primarily involves Merrill's and Goldman's contacts with trading firms that were options market-makers during the period Overstock says naked shorting of its stock occurred—mainly 2004 to 2006. The firms engaged in complex trading strategies involving options, and some were subsequently sanctioned by regulators for violating SEC Regulation SHO, which bans selling shares short without borrowing or delivering them.
Overstock points to one e-mail it says was sent by a Goldman official to market maker Wolverine Trading, a client of Goldman Sachs Execution and Trading—Goldman's prime-brokerage arm. In the e-mail, Wolverine is told "we will let you fail," in response to a Wolverine inquiry as to whether Goldman was "cleaning up fails." A Wolverine spokesman wouldn't comment on this. A Goldman spokesman says the "partially quoted language omits material portions of and misrepresents what was actually communicated in this 2004 e-mail exchange" and that it had nothing to do with naked shorting.
In fact, the Goldman spokesman adds, the exchange "simply described a basic business process at the time when fails to deliver were commonly resolved by a clearing firm 'buying in' [closing] client short positions when it needed to do so, and the client was a registered options market- maker that had declined to pay fees associated with maintaining short positions in hard-to-borrow securities."
In a 2005 e-mail that the Overstock brief attributes to Thomas Tranfaglia, then president of Merrill Pro, Merrill's prime-brokerage unit, this passage appears: "We are NOT borrowing negatives….I have made that clear from the beginning. Why would we want to borrow them? We want to fail them." In a 2006 e-mail, he is quoted as saying: "We don't deliver mm [market-maker] negatives, [this] has nothing to do with availability." In another Merrill e-mail, an unnamed executive says that "we are failing when we have over a million shares of stock available." Tranfaglia, who no longer is at Merrill, didn't reply to a phone message left for him.
"NEGATIVE" IS SHORT for "negative rebate." For most stocks, professional short sellers get a rebate on part of the fee they pay the prime broker for borrowing stock for them. But when the stock is in short supply and tough to borrow (often because many people are shorting it), as Overstock's was for years, the shorts pay a premium, called the negative rebate, to the broker. It can bring the total fee up to 35% of the share price. Thus, if a stock were trading at $10, it would have to fall below $6.50 before a short sale turned profitable.
A 35% fee is steep, and it's even steeper if the prime brokers didn't actually borrow the stock. The possibility of this happening was discussed in a deposition taken in the suit by Marc Cohodes, a short seller whose $1.5 billion hedge fund, Copper River Partners, was a Goldman client.
In the portion of his deposition quoted in the released filing, Cohodes questions whether Goldman had borrowed the Overstock shares his firm was shorting, and alleges that Goldman later helped put his fund out of business to hide improper conduct. Cohodes wouldn't speak with Barron's; Goldman denies his allegation.
In another e-mail, a Goldman hedge-fund client remarks that his firm would ask "to short an impossible name, expecting full well not to receive it and [be] shocked to learn that [Goldman's representative] can get it for us."
Where would such hard-to-get inventory come from? Read in conjunction with subsequent regulatory actions against options market-makers, the Overstock brief appears to indicate that Goldman and Merrill got it from options traders that used a complicated trading technique called a reverse conversion (not in itself illegal) and involving naked short sales and puts and calls, to create fictitious shares.
One of these market makers, SBA Trading, was run by a trader named Scott Arenstein until the American Stock Exchange shut it in 2007. Without admitting or denying guilt, Arenstein and his firm settled Amex charges of Regulation SHO violations by agreeing to pay $5 million in penalties and accepting being barred from the securities industry for five years. According to the Amex disciplinary decision, Arenstein had shorted stocks and then failed to deliver them.
IN WHAT THE OVERSTOCK BRIEF says is an internal Goldman e-mail, Arenstein is described as being "the other side of a lot of our activity." Another cited passage refers to Arenstein and SBA as "providing very aggressive liquidity to Goldman" in the form of conversion trades. Still another, not mentioning Arenstein or SBA, discusses using conversions "to create inventory to allow customers to short." A Goldman spokesman calls that "an insignificant e-mail that Overstock attempted to twist out of context." The firm says all its Arenstein dealings were proper.
A Merrill spokesman, in a statement to Barron's, says its dealings were legal and that "our employees provided testimony to explain these matters and these documents. In the end, the judge ruled in our favor and granted our summary judgment motion" to have Overstock's case dismissed. Asked about the options market-makers, the spokesman replied: "We don't have a comment on the conduct of others."
Rulings are pending on Overstock's appeal and on the media companies' motion to unseal the documents.
If Overstock is granted an appeal, the case with Merrill and Goldman could grind on for years.
If it loses, it might have to pay $2.4 million in court costs that Goldman and Merrill have requested. Not a great thing for a company that had a net loss of $19.4 million in 2011, and whose shares have declined sharply over the past year.
A further price decline would aid Overstock's adversaries, the shorts—assuming, of course, that they can find shares to borrow.
GARY WEISS, a former reporter for Barron's and BusinessWeek, is the author of Ayn Rand Nation, published by St. Martin's Press.
In the conference call, Mike Toups clearly states its the US team that does the audit; I have already quoted this twice. He makes no mention of Tom, Dick or Harry Chan!
How can you find them if they were deleted? I made two posts about GEO one which I reposted and they were both deleted last night.
I can only post 15 messages/day so I will not be able to post soon here, any comments will have to wait till tomorrow.
I
have not deleted any posts by XLT. Seriously I am having much too much fun running circles round him to want to do that.
The affiliate is working for Anderson so it is Anderson doing the audit. Second Toups does not say that Anderson does the audit from the Utah office he said they send a team to Hong Kong to look at the work and approve it. They are responsible.
The phone number is for Tom Chan and Co. call them. They are an affiliate of Anderson enough said about that. My apologies I said the wrong name.
Here is their website:
http://www.hktdc.com/sourcing/hk_company_directory.htm?companyid=1X07P7UL&locale=en
Also a linkedin Profile of one of their auditors:
Gillian Chan's Overview
Current
Audit Senior at TOM CHAN & CO.
Past
Assistant Accountant at WAI YUEN TONG MEDICINE CO. LTD
Audit Clerk at C. L. Choi & Co. / C. P. Sze & Co.
Education
The Open University of Hong Kong
The Hong Kong Polytechnic University
Haking Wong Technical Institute
Audit Senior
TOM CHAN & CO.
June 2005 – Present (7 years 8 months)
- Statutory Audit - Overseas: prepared statutory accounts for firm in PRC which listed or prepared to list in United States (OTCBB / NASDAQ) (co-operation with Anderson Bradshaw, PLLC Certified Public Accountants)
- Statutory Audit - Local: prepared statutory accounts for firm which involved securities, legal firm, college, and mainly in limited by shares, non-listed company
- Financial Information: prepared management accounts for securities industr
You will find him on this list
http://pcaobus.org/registration/firms/documents/registered_firms_by_location.pdf
volume and level 2 do not show short vs. long sales. The stock was ineligible to short (under an exchange restriction) from $1.55 trade halt on. No shares were shorted after that.
Ok you have to be kidding me right?
Here is the phone number listed for one they all have the same area code:
Rbradshaw@abcpas.net
801.281.4700 ext. 110
http://www.areacodehelp.com/where/area_code_801.shtml
Area Code 801 is in Utah
You are saying that Mike Toups, the CFO, is wrong in telling us that the US team is auditing the book? Explain to me that it is David Chan & Co doing the auditing instead. Are people not getting this yet?
If it is an affiliate instead that is completing the audit, then Anderson Bradshaw and Longwei should disclose this, but they have not.
I have to agree with CowBoe regarding the shorting. Most of it was done the day of the article just over a dollar, not much shorting around the $2.25 are but probably some. Volume and level 2 which I was watching showed the activity that day was mainly shorts....
Stock prices don't always reflect the value of a company. Once a stock gets attacked this way it becomes a self-fulfilling prophecy. Even if the allegations are proven false the damage is done. Sometimes what is said is true but some times it isn't. Unfortunately the damage done to legitimate shareholders is very harmful at the expense of self-serving companies like GEO and their ilk.
I agree. I only want to present a balanced view and only responded to his accusations in kind. There are always more than one view to every situation to not accept that is to have your head in the sand. I will not participate in this type of bickering anymore . However I will continue to try and find the truth. If people want me to leave I will. I have nothing to gain here, I just despise one-sided arguments.
Anderson Bradshaw PLLC is a PCAOB registered public accounting firm providing audit, tax, accounting and other business advisory services. We are located in Salt Lake City, Utah with an affiliate office in Hong Kong. Audit services focus on audits of public companies, private companies, with a focus on international clients. Tax services focus on real estate development and high-wealth individuals.
The picture is of Hong Kong but the company is in Utah. The Team Members pages are from the Utah Office. The Hong Kong Office is an affiliate and it is run by David Chan. Please call the Salt Lake number and ask them you will see that I am right. Why bring up that LPH is a client I never denied that. Not sure what your problem is. No one is denying that Anderson is their Auditor. What I am saying is that the audit is completed by the Hong Kong affiliate David Chan and Company who works for Anderson. How hard is this to understand. The reason why this is important and this guy does not want you to see it is that there are no language issues if it is done by the HOng Kong office, plus they are fully aware of all Chinese laws applicable. Stock pumper does not want you know this.
David Chan completes the audit for Anderson they are an affiliate so they are working for Anderson.
XLT is also disputing my comment saying that there were no concerns about Longwei before the Geo report and he is asking for proof that such concerns existed. Once again that is a lie. From his own SeekingAlpha article, dated November 29th 2011 he says
Ok people you tell me who the liar is. He says that he posted the link to the Hong Kong Office. Really?
You suggest I was not aware about the Anderson Bradshaw affiliate in Hong Kong, but the link I provided IS for their affiliate website in Hong Kong. That was the whole point of me providing it. I will again provide this link to show readers how you twist the truth
You are wrong to suggest it is not objective to be concerned about a CFO that has a part time job split between two companies in China, whilst living on the other side of the world. You also failed to address the PCOAB concern about a CFO not being a native Mandarin speaker. It is patently obvious that this is not a satisfactory set up, particularly given all the accounting scandals associated with US listed Chinese reverse merger companies. To not be concerned about this speaks volumes about your credibility and how much you can be trusted.
You are wrong to suggest my concerns were based only on the Geo report. The evidence I provided by the PCOAB was issued way before the Geo report. Moreover, there have been numerous concerns cited about this company in various mediums also long before the Geo report.
I did not say there was definitive impropriety just because of the Geo report; I said there are increased risks of financial impropriety, and there clearly are increased risks, and I have given some reasons why.
I have nothing to do with the Geo team or their LPH research. My concern lays with the deliberate and misleading dismissal of clear risks by paid stock promoters. Whatever you say about trying to discredit Geo, the fact remains that short sellers have outed many fraudulent companies, but again you fail to mention this.
Borrowed from another poster still instructive:
Some Information about GeoInvesting
Also posted on the Yahoo board:
wallshite, great thread about GeoInvesting
(http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_N/threadview?m=tm&bn=111191&tid=8577&mid=8577&tof=7&frt=2).
I decided to verify your information to see if it matched up and did it ever! Thank you for your research and letting us know who is really behind these companies. I also decided that I’d like to find out more about The Market’s Edge/ GeoInvesting and the people who are listed as working there, and I came up with some interesting information. As I found out a lot of information, I thought that it may be best to start a new thread instead of tying yours up. Whenever I use information you have originally researched, I will make sure to reference that it was you who found it out.
First, I turned to www.corporationwiki.com to see what I could find out about Majed Soueidan (as well as Soueidan Majed, as he is sometimes referred to) and companies he is listed as being an officer of. Some of the companies are found on this link:
http://www.corporationwiki.com/Pennsylvania/Collegeville/1116-Pheasant-Ln-Collegeville-PA-19426-a2433949.aspx.
Some additional information can be found here: http://www.corporationwiki.com/Florida/Coral-Springs/markets-edge-frf-management-llc/28447925.aspx.
A few stood out for me. First, a number of businesses (like Medallion Transportation Ltd., the limo company mentioned before) are listed as being located at the same address as The Market’s Edge, so I decided to find out what sort of building this is. According to homes.com, the property at this address is actually a 4 bedroom, 2.5 bath residential home, not a commercial piece of property (link: http://www.homes.com/property/48309107/1116_Pheasant_Ln-Collegeville-PA-19426).
However, not only are The Market’s Edge and a limousine company located out of a residential home, but other companies associated with Mr. Soueidan are as well, such as Las Olas Management, LLC and Oriana Management, LLC. Also at this address is a company which is named Mms International, Limited, which is apparently the parent company of a coin-operated laundry and/ or drycleaner (which is indicated as being owned by Majed Soueidan) named DLC Laundromat (link: http://www.manta.com/c/mtmn8vl/mms-international-inc). Please remember DLC Laundromat’s ownership interest, as it will come up again later when we discuss The Market’s Edge’s Venture Capital activities.
Wow, this sure is one busy residential house! Talk about one-stop shopping: first, a company using this address will pick you up at the airport and take you to this residential home, where other companies, also listed at this address, will potentially offer you financial services, while a third company listed at this address will be happy to have its apparent subsidiary clean your underwear for the flight back home later on, and, again, the limo company will be able to return you to the airport. Amazing!
Is anything so far standing out as a potential red flag for anyone, yet, regarding GeoInvesting and The Market’s Edge? Doesn’t it seem strange that so many various businesses be located at one address, which, again, is listed as a 4 bed, 2 ½ bath residential address, including such companies as a HEDGE FUND (which appears to be what The Market’s Edge is referred to as being in the GeoInvesting About link: “Andy Schmoyer is a Hedge Fund trading assistant at The Market's Edge”) and a limo service?
The second thing that stood out for me is - what is Thongs, Inc?! Was Mr. Soueidan, the founder of The Market’s Edge and GeoInvesting, previously the officer of an underwear store? It looks like the company was started in 2003 in Fort Lauderdale, FL (link: http://www.corporationwiki.com/Florida/Fort-Lauderdale/thongs-inc-4365059.aspx, and bear in mind I’ll bring up that address again when discussing The Market’s Edge’s Real Estate section). I checked his bio on The Market’s Edge’s website, and nowhere is Thongs, Inc. or (if it is/ was an underwear company) his supposed underwear company officer experience mentioned; there just is information about his extensive financial experience working in IR (note that he did NOT work for an equity, debt, or derivatives research group, or even on a trading desk – just in investor relations) for Vanguard, and how he parlayed that into his current career. I’ll get more into the employees’ bios of The Market’s Edge later in another post.
Turning to The Market’s Edge’s Venture Capital page, wallshite has already showed that GeoInvesting’s domain name’s registrant is The Market’s Edge, Inc., but I also found it interesting that TownWatcher’s registrant is listed as The Market’s Edge, Inc. (http://www.whois.net/whois/townwatcher.com). Is TownWatcher, like GeoInvesting, also just another company owned and operated by the same people who own and operate GeoInvesting and The Market’s Edge? Also, wallshite showed that the address listed for Medallion Transportation is the same as for The Market’s Edge, but this also appears to be true for DLC Laundromat, since, as I have stated before, it appears that the laundromat is a subsidiary of Mms International Ltd which is located at the same address as The Market Edge (http://www.corporationwiki.com/Pennsylvania/Collegeville/mms-international-limited/57973529.aspx).
Plus, depending on the source, again, please note that the officer or owner of the laundromat is either Majed or Michael Soueidan.
I checked the Venture Capital page on The Market’s Edge, and nowhere is there any mention of the apparent ownership relationships that The Market’s Edge shares with GeoInvesting, and the potential ones it has with TownWatcher, Medallion Transportation, and DLC Laundromat: why is that? I think that as a prospective client of The Market’s Edge, I would like to know what the relationship is between The Market’s Edge and the other companies listed on its VC page. In particular, as Mr. Soueidan is indicated as being the founder of both GeoInvesting and The Market’s Edge, why is the GeoInvesting section only stating, “The Market’s Edge helped build GeoInvesting?” Why use the word ‘helped’? If the founder is the same person for both companies, Mr. Soueidan didn’t ‘help build’ GeoInvesting, he ‘founded’ GeoInvesting.
On the Real Estate page, the Fort Lauderdale ocean-front condo consultation (link: http://themarketsedge.com/realestate/) caught my eye (it’s the first one mentioned). This stood out to me as I remembered reading that a few companies (Thongs, Inc., Markets Edge Management, LLC, and Markets Edge Advisors, LLC) also were listed between 2003 and 2004 as being located in Fort Lauderdale; all, of course, had Mr. Soueidan listed as their officer (http://www.corporationwiki.com/Florida/Fort-Lauderdale/100-S-Birch-Rd-Apt-2304-Fort-Lauderdale-FL-33316-a1938683.aspx). The building located at this address is called Jackson Tower.
I decided to follow the link given on the Fort Lauderdale listing and arrived at a webpage for MMG Realty (link: http://www.lasolasbeachclub.com/luxury-services.asp). Looking at their maps section, I tried to see if 100 South Birch (Jackson Tower) was listed on their site, and, sure enough, found it (if you keep closing in on Fort Lauderdale find South Beach Park [it’s on 1A, just off the ocean], keeping going North a bit and you’ll locate Seven Isles – Jackson Tower is one of the red pegs to the right).
So, it appears that three companies in Fort Lauderdale which are listed as having Mr. Soueidan as their officer, also were located in a building which, possibly, The Market’s Edge consulted on a real estate deal. Is it beyond a reasonable doubt to think that the real estate deal actually involved the sale of one of The Market’s Edge’s or Mr. Soueidan’s own properties? If this is the case, should this really be considered a consultation if the property involved in the deal actually belonged to The Market’s Edge or Mr. Soueidan in the first place?
Thank you if you’ve made it this far. I’ll continue my examination of this topic soon.
ChaTea
Tuesday, March 22, 2011 5:01:14
Re: ChaTea post# 3004
Post # of 3713
Please read this post about GeoInvesting/ The Market's Edge
I apologize for asking, but I was hoping that anyone who read my post regarding GeoInvesting/ The Market's Edge would please confirm what I have found.
Previously, I reported that The Market's Edge owns a laundromat named DLC Laundromat through a corporation named Mms International Inc (http://www.manta.com/c/mtmn8vl/mms-international-inc). I found out this information both on this website and on corporation wiki (http://www.corporationwiki.com/Pennsylvania/Collegeville/mms-international-limited/57973529.aspx).
Since I made this discovery, the individuals who run The Market's Edge have removed this company (DLC Laundromat) from the Venture Capital success stories page! (link: http://themarketsedge.com/venturecapital/).
Why was this removed?! What did I find that caused them enough concern to remove one of the 'success stories' off of the Venture Capital page?!
And one more to add to knowledge database:
http://finance.yahoo.com/mbview/threadview/?m=tm&bn=111191&tid=8577&mid=8577&tof=7&frt=2).
I am saying there is a much higher risk that the financials could be doctored. Toups is not a native Mandarin speaker or writer. The PCOAB believes this to be a risk as well. Here is what they say:
If you seriously believe that a CFO whose role is split with another company does not have his attention diverted then that says everything about how much you really know. To suggest that his role is only relevant for the SEC filings, and not the internal functioning of the company is equally weak
Anderson Bradshaw only has one native Mandarin speaker amongst its staff. Here is the link:
Joe here is a question for you regarding the $32 million dollar investment. Yes the company
that GEo questioned is listed as a subsidiary but it is incorporated under Chinese laws. I pulled this from their Annual report. The way I understand it they are listed as subs but the way their accounting works the subs control 95% of the stock and Cai personally owns 5% (in trust) so maybe it does not really belong to Longwei. Is it not possible that GEO does not understand the accounting practices in China or at least has misinterpreted it?
Longwei Petroleum Investment Holding Limited
British Virgin Islands
100.0
%
Taiyuan Yahua Energy Conversion Ltd.
People’s Republic of China
100.0
%
Shanxi Zhonghe Energy Conversion Ltd.
People’s Republic of China
100.0
% (a)
Taiyuan Longwei Economy & Trading Ltd.
People’s Republic of China
100.0
% (a)
Shanxi Heitan Zhingyou Petrochemical Co., Ltd
People’s Republic of China
100.0
% (a)
(a)
A total of 95% of the ownership units are held by the Company’s subsidiaries. The remaining 5% of the ownership units are held in trust for the benefit of the Company’s subsidiaries in accordance with local Chinese regulations, therefore no non-controlling interest is recognized. The 5% ownership units are held in trust by our Chairman and CEO, Mr. Cai Yongjun, for the benefit of Taiyuan Yahua Energy Conversion Ltd. and Shanxi Zhonghe Energy Conversion Ltd. The 5% ownership unit held in trust for the benefit of Taiyuan Longwei Economy & Trading Ltd. is held by an individual who is also an employee of the Company. This ownership structure is organized to comply with PRC and local business ownership requirements.
Wind down does not jive with these statements:
Mr. Gentry continued, "When multi-billion dollar funds like Paulson & Co. and The Carlyle Group, with their unlimited resources, are unable to detect fraud in their Chinese-based portfolio companies; when top-tier investment banks like Goldman Sachs are unable to detect fraud in their Chinese-client companies; then I think reasonable investors must take a step back and seriously consider whether the potential rewards outweigh the downside risks of investing in U.S.-listed Chinese companies. We simply are not willing to take the risk."
"If we cannot trust the audit work of firms registered with the Public Company Accounting Oversight Board ("PCAOB"), which is the final line of defense against accounting fraud in Chinese companies listed in the U.S., as has been proven in dozens of cases over the past two years, and the Chinese regulatory authorities are not willing to work with the U.S. Securities and Exchange Commission ("SEC") and the PCAOB in helping uncover fraud and punish wrong-doers, and apparently they are not, then it is time for investors to jettison the China sector," stated Mr. Gentry
Well I don't assume anything..you know there is talk that LPH is going to have a web conference stating that the GEO tapes were faked or doctored and they said they are going to prove it, so we will see if that is true.
Really show me where the wording left room for that one as you say. They had 3 clients according to this. They decided to leave China months ago yet they sign a deal to renew their contract? Seriously what part of b/s do you not understand. If they decided to leave the country months ago and they site Paulson, the Carlyle Group etc .. then why sign a deal on December 28?
Anyway here is the release tell me where you see you magic writing:
ORLANDO, Fla., Jan. 3, 2013 (GLOBE NEWSWIRE) -- RedChip Companies, Inc. ("RedChip"), an international small-cap research, investor relations, and media company, today announced that it has exited the China small-cap sector and terminated its contracts with its three Chinese clients.
"We made a decision to close our Beijing office months ago and wind down our China operations," stated Dave Gentry, President and CEO of RedChip. "Wall Street has, for the most part, lost confidence in the financial reporting of U.S.-listed Chinese companies. We are concerned that Big Four accounting firms were unable to detect financial fraud in companies like Sino-Forest and Longtop Financial."
Mr. Gentry continued, "When multi-billion dollar funds like Paulson & Co. and The Carlyle Group, with their unlimited resources, are unable to detect fraud in their Chinese-based portfolio companies; when top-tier investment banks like Goldman Sachs are unable to detect fraud in their Chinese-client companies; then I think reasonable investors must take a step back and seriously consider whether the potential rewards outweigh the downside risks of investing in U.S.-listed Chinese companies. We simply are not willing to take the risk."
"If we cannot trust the audit work of firms registered with the Public Company Accounting Oversight Board ("PCAOB"), which is the final line of defense against accounting fraud in Chinese companies listed in the U.S., as has been proven in dozens of cases over the past two years, and the Chinese regulatory authorities are not willing to work with the U.S. Securities and Exchange Commission ("SEC") and the PCAOB in helping uncover fraud and punish wrong-doers, and apparently they are not, then it is time for investors to jettison the China sector," stated Mr. Gentry.
Over 50 Chinese companies have either been delisted or defaulted off the NASDAQ or NYSE over the last 24 months.
Mr. Gentry also added, "Muddy Waters, GeoInvesting and Alfred Little have done a great service to investors in uncovering fraud that the biggest and 'best' accounting firms in several cases did not uncover. We should applaud their work."
Also, I find it difficult to believe that Geo isn't at least somewhat on the level here. I don't think they would risk it all and not do their homework. They may have slanted things a bit but to say this was the worst of the worst, seems a little farfetched if they weren't close to truly believing that.
Its all there read all their reasons for shorting the stock .. the fact is they were wrong. Sometimes things are not as they seem. The way these guys operate GEO, Muddy and Little they don't bother to find out how a company is operating they just make assumptions. Sometimes they are right but sometimes they are wrong and all these guys have been wrong more than once. Once again I have no position here. I asked a question about their financials on the board no one responded so I left it alone. Then I saw what happened the next day and I find this fascinating, getting at the truth that is. I tend not to believe things that people tell me and there is a lot of things about GEO that I don't like.
How can you defend REDchip? They said they decided to leave China a few months ago yet they signed a renewal with LPH on December 28th how does this make any sense to you?
Your entitled to your opinion I need to see the response from the company before I make mine
In September Longwei posted this for their Huajie acquisition:
http://finance.yahoo.com/mbview/threadview/?&bn=c0a667df-8f0d-3ee9-8dda-972b0870fabf&tid=1357359873351-c28fb138-5a96-424b-8224-40b99e365846&tls=la%2Cd%2C18
translated:
Longwei petroleum in 1995 by the Ministry of Commerce approved the establishment, the registered capital of 300 million Yuan. Is a diesel, gasoline, kerosene, asphalt and other petroleum products wholesale and retail of large private petrochemical enterprises, both fuel strategic reserves of national defense functions. Companies adhering to the "quality first, sincere service" business philosophy, implementation of "best use I use" employment mechanism and "enterprise with your pace" strategy of innovative thinking, due to acquisition of huajie oil in September 26, 2012, is recruitment excellence in all sectors of the community to join, longwei the cause together.
Job description:
1, accounting, finance a college education, solid expertise, junior and intermediate titles, language ability, customer awareness, steadfast, steady, hardworking, dedicated, familiar, foreign-invested enterprises in accounting and tax process.
2, more than two years of financial experience, familiar with the relevant business processes, are familiar with UFIDA Software. Serious and responsible work.
Job requirements:
1, finance professionals and college education;
2 solid theoretical base and have more than four years of work experience
3, with their qualification, familiar with computer and Office software, familiar UFIDA, gold plate or other accounting software is a plus;
4, good communication skills, familiar with the tax, banking and other procedures;
5, steady practical, positive, serious and responsible, with good professional ethics.
6, accounting firms, financial company working experience is preferred
Contact:
Contact person: HR Department (contact please say when you saw at the fair network)
Contact phone: 15,834,021,752
Address:, Valley Street, 30th, wanbailin district, Taiyuan, Shanxi
Why post hirings for phantom operations as GEO claims?
Here is a quote from a Chinese website that may agree with the Yahoo post about dividends:
http://news.imeigu.com/a/1357284207927.html
Here is the original link from the story :
http://cn.ibtimes.com/articles/18797/20130104/china-concept-shares-nyse-lph-short.htm
Translated from Google but the gist of the message is clear ..." we will make a public statement to explain the company's financial position, to refute the allegations..."
"We have learned that the report of The GeoTeam hurt investor confidence in the company, EST tomorrow in order to boost the stock price, the company will make a public statement to explain the company's financial position, to refute The GeoTeam short allegations."
I see no evidence of anyone resigning here. The pr firm Weitan is still on-board, accountants, management and no one from the company resigned as was predicted by some here.
In digging around the story I also saw this line:
"Major sales account for a large-scale gas stations and energy companies, as well as small-scale supply to small gas stations. Has its own transport system to transport the products."
Here is an instructive case about Geo Investing regarding Zhongpin (HOGS)
This was the GEO case against them. They shorted around $8.00, got the stock to $6.69 at the low. Today it is $12.86 more than double.
http://finance.yahoo.com/echarts?s=HOGS+Interactive#symbol=hogs;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
Zhongpin: Overstated Income, Excessive Capex and Deceptive SAIC Filings
August 17, 2011 | 18 commentsby: The GeoTeam | about: HOGS Disclosure: I am short HOGS. Risks do exist when shorting companies where revenues between PRC and SEC filings are in line, but diverge on the net income line. Such companies still may possess some “perceived” value as a going private candidate (to institutional firms who may be oblivious to the fraud case), especially if the net income difference is related to tax avoidance schemes. Still, in the current environment, companies that may have manipulated SEC documents have left themselves open to significant risk. We will have more on the “going private games” and why we think PE firms may be making some risky bets that might not pan out. See our Terms of Service here.
We recently conducted thorough due diligence on Zhongpin Inc. (HOGS). Based on our work and the observations of our investigators who have visited HOGS facilities on various occasions, we conclude that: HOGS is in fact processing and selling pork products in China. However, while HOGS is clearly not an "empty shell" we did find clear and substantial evidence of possible fraudulent activities.
Summary of Findings
Overstatement of SEC net income vs. SAIC filings by nearly 500% in 2009.
GEO estimates 2010 net income of $10-20 million vs. $58 million reported to the SEC.
Deliberate manipulation of SAIC filings.
Likely diversion of almost $150 million of reported capex.
Inconsistent trends between inventories and sales.
Repeated capital raisings, despite assurances to investors that none were needed.
Capex concerns already noted by Roth Capital resulting in downgrade.
What Is Zhongpin Inc. Hiding From Roth Capital?
In its 2011 second quarter conference call, Zhongpin (HOGS) refused to respond to Roth Capital's questions, posed in an earlier research note, concerning the accuracy of the average capex and land use rights spent for the average slaughtering facility alleging costs are high relative to peers in the industry.
We find HOGS refusal as a blatant disrespect for an Investment Bank, which is attempting to proactively bring clarity to the ChinaHybrid space, as a huge and obvious red flag that leads us to question the legitimacy of HOGS' operation. The reasons that HOGS gave to ignore Roth's request were unacceptable.
Reason 1: HOGS said it had concerns about 'selective disclosure.' We find this mind boggling since this is what analysts do. They ask questions and then disclose their findings. Regardless, we hardly find Roth's questions to justify capex as classified in nature.
Reason 2: Risks to competitive advantage if the information gets out. We believe this is just a ridiculous boiler plate answer. This is the same answer that many fraudulent ChinaHybrids used when they were attempting to explain why they did not report accurate numbers to the SAIC, even as they bragged that being a U.S. listed company gave them increased exposure, and basically belittling the fact that any legitimate competitor could easily access public SEC filings. HOGS, we have a little secret for you. You are not operating in a covert environment where your formidable competitors do not have access to the same information you do.
Reason 3: Professional auditing standards and precision that might or might not be applied by Roth. Talk about getting punched in the face. HOGS, are you really claiming that Roth is unqualified to interpret answers to simple CAPEX and land use rights issues?! You had no problem with them building forecasting models based on information you provided to them. You also had no problem raising money through IBanks, but now that it seems you feel they may not be qualified to fully understand the 'complicated' swine business. Are you telling us that we should take analyst financial estimates with a grain of salt? Please enlighten us on the complexity of the accounting issues regarding land use rights and use of capex. Educate us.
Red Flags Flying Over HOGS
In evaluating HOGS, there are an abundance of red flags indicating the high likelihood of deceptive practices, including:
As reported to the SEC, over 6 years HOGS' revenue has increased 20 fold (2,000%) to nearly $1 billion in 2010 from $42 million in 2004. During that time, store count has only roughly doubled.
Zhongpin has often misled investors by repeatedly stating in its filings that it could fund its expansion through access to lines of credit and internally generated cash flows. Ensuing actions to quickly proceed to raise equity capital contradicted these statements.
Zhongpin's debt/equity capital raises since its reverse merger in 2005 have been excessive - raising $432 million in debt and equity capital so far.
Substantially all of the capital raised has been poured into capex to expand new facilities, with the result that the company has been able to generate very little if any free cash flow in its history.
This massive capex expansion has aggressively continued despite consistently low profitability with a net income margin of only 6%.
Zhongpin has misrepresented its business using the term "stores" to describe simple one man, 6 foot wide meat counters located within open air vegetable markets. Few of the "branded stores" are even free standing buildings.
Zhongpin has misrepresented its focus on higher income customers. Zhongpin sales counters ("stores") are located within low cost open air vegetable markets which are frequented by low income Chinese. In addition, the majority of these "stores" are located in China's poorest provinces such as Henan, with only a minority located in higher income areas such as Shanghai and Tianjin.
Zhongpin only recently disclosed its list of store locations on its website, and the list was unusable since it did not contain actual business addresses. Instead, the company used district names or names of entire cities to identify many stores. Moreover, the list was in a format that could not to be printed and was subsequently removed from the website. Visibility is the lifeblood of retail stores, so the reluctance to reveal their locations is highly concerning.
Zhongpin's claims in a recent press release that it operates at higher standards and efficiencies than its industry peers:
"Zhongpin's "advanced" processes produce higher yields of carcass meat and all pork products than are typical." (1)
"Zhongpin's advanced industrial cluster concept usually results in more rapid improvement in capacity utilization for new plants than is typical." (1)
"Zhongpin's capital investment intensity is intentionally higher than is typical". (1)
"Zhongpin's gross profit margins are significantly higher than Chinese industry peers".(1)
(1)Source: HOGS press release Dates June 6, 2011
We believe a HOGS price per share of over $5.00 does not take into account the probability of materially overstated net income or the possible diversion of capex. Investors should note that other Chinese small cap companies with similar circumstances have suffered auditor resignations, trading halts and even delisting of their shares.
Given our findings and despite the share price of HOGS hovering near its 52 week low, we have initiated a short position in the company's shares.
Key Findings: Overstated Income, Excessive Capex and Deceptive
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Thanks for that. I noticed on the site it said 77 employees and I verified this on LPH's web site. Some people on here keep talking about 40 , so I am not sure where they got that number from?
OH they don't matter because GEO says so!
They only use the words opinion and we believe twice in the article so they may be exposed because they are making allegations of impropriety. They also make assumptions about factual evidence by summarizing their opinions and making them sound as facts.
LPH stock in our opinion is virtually worthless, completely un-investable and should be immediately delisted by the New York Stock Exchange ("NYSE")
Longwei Petroleum: The Most Brazen China-Based U.S. Listed RTO To Date
First of all let's get something straight here I do not have a crusade against anyone. What I don't like is the tactics of the short "gangs" as I call them like Geo, MUddy Waters and Alfred Little. Some of the things they do are appropriate but their tactics leave a lot to be desired. It is not about the innocent shareholder of the companies in question is it? It is about maximizing profits by initiating short positions then putting out these "hit pieces" Geo themselves was victimized with CCME, look it up.
Tell me the reason that you can't approach Longwei or any company with the information and only disclose it if the company fails to address it? The answer is simple MONEY, there is no money in that approach but would that not save innocent shareholders who bought on public information? Of course but they don't care. So let's call a spade a spade.
It is even easier to doctor a company's financials, particularly when the CFO has a role that is split with another company
Mr. Toups was appointed as Chief Financial Officer of the Company on September 15, 2010. He also currently serves as Chief Financial Officer of Longwei Petroleum Investments Holding Limited, a China-based petroleum distributor listed on the NYSE AMEX, a position he has held since June 23, 2010. Mr. Toups was also appointed to serve as Chief Financial Officer of Worldwide Energy & Manufacturing USA, Inc., on February 23, 2011. Mr. Toups' expertise includes PCAOB audits, SEC reporting, and Sarbanes-Oxley compliance. He is also well-versed in Chinese business practices and has directed strategic planning for Asia-based companies for over twelve years
Also, the auditor Anderson Bradshaw is obviously not capable of properly auditing the financials of LPH.
How hard is it with today's technology to doctor a video? I mean they could take days worth of videos and then put together a time-lapse version with only the times where there is no activity. Given that this company (GEO) is admittedly short and working with groups of shorts how much more motivation do they need? Take a look at the fiasco which is CCME they (GEO) were warned it was a fraud, continued to back it any even at $3.50 now the stock is $.02 , these guys are not infallible. Also I looked at the Supreme court ruling regarding Silvervorp v Alfred Little et al. Basically as long as the writer uses words like "in my opinion" and" we believe" etc they are constitutionally protected by the law (first amendment rights). Keep that in mind when you read these. Many companies have been attacked, it then becomes a self-fulfilling prophesy , stock gets clobbered even if the company is viable. Then it becomes a matter, are the listing fees worth it considering the price? One of the reasons for listing here is to raise capital that goes out the window when these things happen. Some companies are truly scams and those are not just Chinese . Others are caught in a vortex and can't recover.
They said the company has material news to provide the exchange and will trade once it has done so. I expect it might go back to t1 status but I didn't ask.
I see that the streamer shows 2000 shares traded @ .40 . Not sure what that is from but I have other sources and they show no trades
If you go here:
http://www.nasdaq.com/symbol/lph/after-hours
You will see all the trades were at 4:07 most of them were cancelled trades. Looks like brokers adjustments not trading. Last trade shows as .50 500 shares
Have a look.
Forevergreen ... no it is not....
essentially yes...
Actually I called the exchange and that's what they told me.
Exactly what you have here is circumstantial evidence from a group that has attacked LPH before and other companies. Why do they have only certain days. I am not saying they are wrong because I don't know but the response from the company will be interesting. They did say the information reported :
report contains numerous errors of facts, misleading speculations and malicious interpretations of events.