Hey, Anyone here follow BSQR or MGPI?

Maj

What does the new company do?

http://blog.geoinvesting.com/?p=5403

our report from this AM

You are shocked that I said that OTG due diligence isn’t useful? Sorry, but you misunderstood. I do believe that OTGDD is important; just not company directed OTGDD. We perform onsite visits without management holding our hand.

I really do not care what a California court that does not understand PRC law concludes. I will listen to my PRC counsel. I will also reference Deloitte which endorsed the usefullness of SAIC/SAT filings in their CCME audit debacle.

You really need to study GeoInvesting's work before you knock our DD.

Tell Dixon to have a top 4 complete an audit its books. I dare him.
Is he in China or the U.S. right now?

The stamp issue? Trust me, there is no stamp issue. However, there is an issue when directors resign. There is an issue when a supposedly legit company retains one of the most sub par auditors.

You need to tell Kevin to really embrace what he learned as a CFA and take a closer look at the LLEN story.

Scandal,

Maybe they owned a fractional interest? The SAIC filings clearly show that llen owned no percentage of any fraction. But if you believe that LLEN maybe took part in a shell game, I can't for the life of me fathom why you would own it. If they were playing a game this stock will be delisted. Speaking of delistings.. SCEI is now officially delisted and DEER was just halted. It may take time, but the NASDAQ has not forgotten about the China space. I am not getting lulled into a sense of security just because a stock is not halted shortly after reports.

I am curious what makes you conclude that the seller was playing shell game?


I think we all know by now that we have to take site visits of ChinaHybrids with a grain of salt. Remember CBEH or CGAC?

I know it is asking a lot, but we did not bribe anyone in the LLEN investigation, including the people who ran the ad posting the sale of the Ping Yi mine. I guess you need to look at our track record to decide if you have faith in our DD. You also need to realize that we are not short sellers buy nature. Most of our positions in U.S. names are long, except for penny stock pump and dump schemes. You may not be aware of this , but we have written 5 exposes on U.S. penny stocks playing in the pump and dump space.

RAYS: http://seekingalpha.com/article/316946-raystream-remains-under-scrutiny-even-fails-to-disclose-loss-of-one-alleged-customer

http://seekingalpha.com/article/319767-as-raystream-s-customers-mount-so-does-skepticism

SEFE: http://seekingalpha.com/article/554371-sefe-inc-s-hot-air-balloon-about-to-burst

GWBU: http://www.geoinvesting.com/companies/gwbu_great_wall_builders/research/investor_alert/0038329

DIMI: http://www.geoinvesting.com/companies/dimi_dimi_telematics/research/investor_alert/0038672

ONVO:
http://www.geoinvesting.com/companies/onvo_organovo_holdings/research



Still believe our DD is flawed?

You don't think any of that will change until there is some form of regulatory cooperation between the two countries?

Can't wait to see how the Chinese Government dupes us on future cooperation, but I will keep the hope. This is the only partially logical statement you have made.

Now back to your ignorance:

You simply stated SAIC filings are not very reliable documents and I stand by that assessment.

Common Chad.. Open your eyes. SAIC filings are what busted PUDA and what we believe the regs will reference to realize that LLEN has some explaining to do. Deloitte referenced SAIC filings in the CCME case. Remember that one??? Do you even keep up with what is going on? Let's not forget about Ali Baba SAIC filings showing that management stole the company from Yahoo!

You asked: if independent audits can not be relied upon then what really is the point?

That is exactly the point. Most are still clueless and satisfied to hide behind disclosures.
But there are a few auditors attempting to perform more DD.

Regarding class action suits against auditors. With their disclosures i am not sure this will happen unless it can be shown that they passed audits even when they were sent details about fraud. Some of these fraud cases only require that the auditor make a quick 10 minute call to a PRC government agency.

That is funny that you say that "you can't just rip-off existing shareholders." What do you think the majority of these companies have been doing?

Now, so that you understand what I was saying earlier regarding the fact that no legitimate company wants to acquire these companies. I never said anything about these stocks being acquired at their current multiples. lol you don't even have any offers of any kind. Oh wait. Didn’t LTUS and WKBT talk about merging? I had good laugh that day.

I am glad you have spoken to your business attorney contacts. And we have spoken to ours.

Sure, there may be some fudging of financial numbers by legit firms to some extent, but not to the point that it would raise red flags. Reporting revenues of $1 million to the SAIC when you are a $100 million dollar company is absurd. However, even if one is willing to accept this type of scenario, here is one fact: There are some things that won't be fudged with SAIC.. One of which is ownership history as there is no logical reason to do so. (LLEN)

I love this excuse for fudging SAIC numbers: "We don't want our competitors to know how successful we are!!! We will brag about how great it is to be a U.S. listed company and the domestic respect it brings us!!!! Oh and by the way here are secret SEC filings that are competitors will never find!!!!!!!!!!"

You said:

"Chinese business practices are quite a bit different than what we consider normal in the western world. It's these differences some people try and exploit."

U.S. investors are not ready to accept these cultural differences. The cultural differences are what make investing in China a risky proposition. How do you know when a company has crossed the line?


Your logic is misguided. That is like saying: "hey if stealing and bribery is ok in one culture we should accept such actions in our culture."

Play by our rules or get the heck out.

Chad, your arguments are outdated. You obviously have not gone one by one and looked at the multitude of fraud GeoInvesting has flushed out. You need to respect ours and others research.

You still have not answered my question. Do you conclude that matching SAIC filings equates to fraud?

If these reverse merger Chinese companies were legit and so cheap why haven't they been acquired? To put this into perspective, since we launched GeoInvesting around 13 GeoBargains/Specials have been gobbled up. (BTW two more probably on way for hefty premiums)

It seems that LLEN issues a press release every other day. How many advisory members are they going to appoint?

Is that the extent of your DD and questions? There was no bribery on our part. Our recorded phone conversations came well before the notary meeting.

Let's just let the market play this out.
I think we both have more important tasks to accomplish.

But you see.. We agree with your comment:

"The purpose of this board is to find Chinese stocks that have a lower risk of fraud for long positions, just as your team at GEOInvesting does, and/or to short those that are higher risk of have sound research supporting the claim of fraud for a short position."

Through our DD and sound INdependent research, we believe that a long position in LLEN carries an enormous amount of risk.

Sound research is a lot more than "having a management team that are American citizens."

At best, here is what I think LLEN is: a low margin procurement operation that puts buyer and sellers of coal together; they probably just receive a middleman fee. I believe that they don't own the mines, but via "favors" are allowed to put "LLEN" signs up to appease investors. Of course this is only an opinion.

You don't think it’s very suspicious that LLEN allegedly "sold the Ping Yi Mine" back to original owners after we released our DD?

One thing you need to realize is that SAIC filings do not lie. They show changes in ownership history. Period. According to SAIC filings LLEN never owned the mine. Stop trying to make excuses.

I presume that the only thing LLEN can do to save face is find some way to convince a gullible party to help them go private.

So I guess, according to our opinions.. we agree to disagree.

I decided to surf I-Hub for a moment after being away for a while. Tell me? How was our research proven to be a fraud? Some people never learn. You continue to choose Chinese management over research outfits with proven success. BTW..

This is one of the most absurd comments (that you made) I have come across:
"none of these other stocks have management that can be held accountable to US laws and SEC regulations....except for LLEN, whose management is 100% American citizens and either live in the US or would be easily extradited if there were any foul play."

You do realize that American citizens do commit fraud? Furthermore, Dixon could just go to China and never come back. You think he would be easily extradited? What evidence supports your assumption that China will cooperate.

And I almost forgot.. How about that auditor they still refuse to replace..

LMAO. Are you still that ignorant? I guess the companies that have stolen money from investors are not crooks? I have an idea.. Please suggest the proper protocol that you feel should be followed in order to expose frauds.

Let me give you a head start and tell you what does not work:

1. Analysts and IBanks
2. IR firms
3. Lawyers
4. SEC
5. everyday message boards

Now, I can't wait to hear your suggestions. And of course. I assume you will want it done pro bona..

And just to let you know.. Several fraudulent Chinese companies have yet to exposed.. Stay tuned.

ECRY This pump is about to end badly.

http://www.geoinvesting.com/companies/ecry_ecrypt_technologies/research/pump_and_dump_watch/0033892

Agree.. This pump is about to end badly.

http://www.geoinvesting.com/companies/ecry_ecrypt_technologies/research/pump_and_dump_watch/0033892

ELTK Quarter was actually better than the reported 0.09. They did $0.12 non gaap.

solid? please explain?

T bird.. I am posting most of my info at our geo board.

we are looking to interview WTT soon

http://www.geoinvesting.com/forums/SingleMessageView.aspx?mid=12665&twt=0&fb=0&lnkdin=0#singleMsg

Recent new GeoSpecials

FUEL
EDAC
NOIZ http://www.geoinvesting.com/companies/noiz_micronetics/research/geospecial_notes/0033590
SIF

Chad..

Really. You want to have a discussion on navigation? You are funny. The customer does come first, which is why our capital is being spent on finding the truth rather than aesthetics.. Clearly as a promoter, what you are good at.

BTW,, regarding SIAF, we did contact you via email and via phone conversations, many many many months ago. (you actually replied with a nasty email). I told you everything i had on SIAF and you said that since you were not sure if you were doing IR (i.e getting paid) for SIAF anymore you may not be the appropriate person to deal with.. Said like a true promoter where your own motives come first.

What is funny is that you even admit SAIC filings do not match. Thank you for confirming this truth. All we ever asked is that you cordially addressed our concerns.. You never did.

Tell me.. How many investors are left in this space? A lot less than 6 months ago. And a lot less soon. Along with cosmetics, most of the negative feed back about our site is from members complaining about the back and forth banter such as this. We listened and will allow no more useless chatter and are revamping the site. Our model is not to capture an entire market.. It is to capture a very small part of the market where open minded discussions increase the chance for opportunity, while avoiding dishonest companies (You will be happy to know that we are actually increasing efforts to expose fraudulent U.S. firms too). At some point we will likely cap memberships. Oh BTW.. you have no idea how well we are doing or who is knocking at our door.

I have MUCH MORE important things to worry about then the navigation. That will get better over time.

Why do i waste my time here? To hopefully come across a few oen mined knowledgeable investors to chat with.

But I will say this... the navigation here is wonderful!!!!!!!

Besides, i was chatting with Rato.. not you..

Rato.. You are wasting your time attempting to convince certain "investors" that the majority of RTO space (china or U.S) is anything more than an SPV.. special purpose trading vehicle. An investment in these names will end badly, except for the few that go private (at depressed multiples). A false sense of security has arisen since the NASDAQ/SEC has been seemingly quiet. The ABAT halt should be a warning that just because you are trading today does not mean you will be trading tomorrow.

I am hopeful (but not optimistic) that the 2011 audit season will flush out the remaining fraudulent firms.

Anyone here play TIS

http://geoinvesting.com/forums/yaf_postsm12503_TIS-Ex-GeoBargainnbsp-1380Stock.aspx#singleMsg

You also may want to check out

DFZ
EDAC
NOIZ
CVU
CMT
ABG
RUSHA

Just started looking at KS

NO way CHCC buyout happens.

http://geoinvesting.com/companies/chcc_china_chemical/research/investor_alert/0033007

Thanks Rames..

Value.. I see that you still refuse to hold the companies, themselves, accountable. Tell me.. what is the alternative for cleaning up the space? Because the IR firms, Ibanks, lawyers and auditors have done little on this front. Instead of whining.. give us your solution and I will consider it.

You blame the shorts for investor demise. But if we would have listened to them a long time ago we would have preserved much more of our wealth.

Stay tuned..

Dodgy?? really?

That is exaclty why i started the geoinvesting premium sevice. To give the retail investors a chance to compete with the hedge funds for information. Similar products will cost north of 30K, just for a report.

The sad truth is that most retial investors just don't get it. If we can build a large data base of retail members to help fund DD.. the sky is the limit.

The information is out there...

Rames, I agree with most of your points. However, I actually think OTGDD is the only option for most of the China stocks. But here is the problem. The frauds are easy to find via a couple layers of OTGDD. The challenge is vetting the stocks that pass the first few layers of DD. We may have to peel away 4 or 5 layers of DD before we find flags in a seemingly "legit" firm.

I am actually working on such a case right now. Greed has even gripped the legit firms.

As for your statement:

"However, this is an unsustainable situation. I actually love the Longtop story as it might really speed up regulatory action and inter-government talks between the U.S. and China. This is a major case of fraud, one of the biggest in recent years. We might get to the point where China can no longer choose to ignore this, and U.S. regulators have some serious ammunition to either enforce shareholder protection or force non-complying Chinese companies out of the U.S. markets."

1. I hope this is the case, but we are talking about revamping a cultural attitude. And that may take several years. I don’t think regulators are anywhere near establishing appropriate resolutions. It is a joke, actually.

2. The other problem is that IR firms and Ibanks still do not get it. I had a one hour conversation with an IR firm today that just will not take the time to perform or outsource DD. For one or two months of IR fee, at most, IR could have a company vetted. It is like speaking with a brick wall.

3. For the foreseeable future, these companies will have enough hair on them to attract hit pieces. It is utterly unbelievable!!!!!!

Rato...

See ORS post

http://geoinvesting.com/companies/ors_orsus_xelent_technologies/research/investor_alert/0030515

CNIT was also a gift short this am..

Sorry for the late response. Been pretty busy..

Agree on most points. But

Drastic mis-matches for FIE pretty much guarantees an element of fraud, especially when rev match and net income does not (CBEH is such a case, which was actually a VIE!!!!!!!)

Going forward, i am sure we will see more SIAC matches. These are likely the ones that have only committed tax fraud or found a way to use money they fraudulently raied to build a real company. However, I am extremely concerned that fraud is occurring at the SAT level too, a situation i feel could get worse in low tier provinces.

Your Risk model is a great idea. As we discussed before, we are using a risk model, but with less criteria. In the end, I really do not think the majority of these stocks RTO/IPO can be thought of as investment grade unless a level of OTGDD is accomplished. And the ones that are investment grade have high valuations.

Even legit companies (PUDA, Alibaba) find ways to screw the U.S. investor.

joe, No need to apologize. Nothing wrong with a difference in opinion. The key here is to move forward, so we can all make money and or protect our portfolios by eventually creating a healthier space to invest in.

pp3.. You say

"However, you fail to come to the realization that many of these "hit piece" authors are in it just purely to manipulate the stock lower. They take a short position, then put out misleading (and often false) facts in a hit piece with the sole intention of manipulating the stock downwards. I've been on site of some of these companies - if these hit piece authors actually did real research, they would realize that their statements are misleading and false. But they don't care... They are not Honest, like you claim"1. Please help me understand what the misleading information existed on the following stocks that Geo published

SBAY- (think we all can agree this was a sham).
CGPI- recording of authorized official confirming license is not current
LTUS- GeoInvesting got the company to disclose that Inner Mongolia (alleged) payment was made to a vege company. Yet no disclosure in the 2010 10K?
CELM- mismatching SAIC filings (now halted)
PUDA- Company basically admits to wrong doing.
SCEI- prove to me that GeoInvesting findings regarding an opinion that logistic company information the company provided is authentic.
NEWN- tell me how our findings of potential related party relationships are false.

And yes, Geoinvesting has interviewed management in the past and heard all the wonderfull fluff that it appears you still want to believe.

And yes, GeoInvesting does go on-site, just not via a company sponsored dog and pony show.

what you fail to realize is that geoinvesting is on your side. We are doing our best to perform independent research without the influence of management or IR. We attempted to work with IR firms for well over a year, but they can't afford to accept the truth. I saved the emails.

What you fail to realize is that the geoinvesting business model does not maximize the profit potential of a purely institutional model or one we could easily keep in house. Not even close. Let me spell it out for you. Geo members have access to a brilliant PRC attorney, a seasoned CPA and related DD team for $10 a month. If you can beat that let me know. By attempting to discourage this type of service, you only hurt yourself in the end.

what you fail to realize is that DD is going to become more difficult as companies and IR become more clever, like amending SAIC filings without disclosure. I Fear that SAT agencies in some areas may start to be compromised.

it is funny how some investors are all for research that supports a bullish view point, even if its wrong. We understand that going short is not easy and is hard to accept. It has never been a staple of our investment philosophy, but we woke up to reality and you should too.

CGPI was just to make a point.

SCEI-- So do you believe that SCEI data only equates to 10% accuracy?

No reason to address ONP: I have no opinion either way. But if you do some homework you will find some pretty interesting stuff that has not been discussed.

LTUS- they had a plan. Changed it .. And right back to the plan. Wake up!!! Also, the company admitted to paying money to a vege company and this info does not end up in 2010 10K? The auditor needs to wake up. I will go back and see if I addressed your "DD" message. But does it really matter? Your mind is made up.

PUDA and YAHOO both reveal the same risk. Of course, much worse for PUDA. I don't care what Yahoo does or does not call it. I call what happened in both cases as fraudulent actions. Yahoo will not sue because they know they won't win this corrupt legal battle.

Seriously,, what would it take for you to understand that this space is Toxic? Every week i find a new company hiding behind a vail of deciet, just as I did today. TBA

In other news, I also do have some positive news I will publish a blurb in geoinvesting that may help the space.. long run.

Sorry but your interpretation is incorrect. The real inference was that the SAT agency did not directly comment on the hit piece number vs. the SEC number. Just that they were different. lol they never said they matched. Get it now???? So.. if they did not comment directly.. Why not?

Also, if you read all the information I wrote about GFRE, you will see that it was inconclusive.

I also recently mentioned in our premium boards that our SAT numbers matched SAIC numbers in the new hit piece.. as it should for an FIE.

The only correct comment you made in your post is that we are not short GFRE.. But we are not long either, nor do we have any immediate plans to go long.

Realfast.. You are kidding right? I beleive I wrote you back saying that I did not agree with your claim of contradiction.

where is LTUS today? What is a contradiction is how they said they will sell the Mongolia land... and now are back to developing it.

so now you are assuming that Rick thinks that SCEI is 90% accurate? And you think PUDA is no big deal?? The irony about PUDA is that when a Chinese company is legetimate, they take it away from U.S. investors.

It is amazng how blind some investors can be when evidence is placed on the dinner table, including recordings (CGPI)!!!!! It is both amazing and sad.

I guess this is what not effective internal controls leads to:

Please note the following statement in Weikang Bio-Tech (OOTC:WKBT) 2010 10KNet cash provided by financing activities was $4.35 million for 2010 compared to $2.55 million cash outflow for 2009. The cash inflow in financing activities for 2010 mainly consisted of proceeds of $4.32 million from stock issued in a private placement. The net cash outflow in financing activities for 2009 mainly consisted of payment of $3.81 million for the remaining portion of the acquisition price of Tianfang; net of a repayment of sales receipts of $1.26 million from management previously deposited into a personal bank debit card owned by the Company’s officer mainly for the purpose of convenience on payment collection.

Geo response

http://geoinvesting.com/geowire/324/geoteam_responds_to_scei_intentions_to_take_legal_actions_against_geoinvesting

Yes. that's what it would mean.. the key here is will the hit piece just reference SAIC or will it have SAT too.