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Dang, cant stop laughing, good job buddy!
Yes I agree that they are just performing what you suggested it is quick. Cash and Tax is something easy that can be done in 3 days, what i am more concerning is in their CEO letter they told us they will verify the buses. I am just hoping that they dont do it anymore(as I think it is meaningless when everyone confirms their bus numbers are real?)
If they do verify the bus, the big four auditor is not going to just call the bus operators, they will do a lot of site visits(like Luo Ping did with Shanghai Ba shi), that takes time.
Also, as an ex auditor, I would be really surprised if Deloitte didnt get panic over this whole drama(auditors are very sensitive about it). In big4 there are couple of layers, if it is a small issue, the engagement team will handle it(can take care of it quickly). If it is a medium issue, the regional risk management team(in this case Hong Kong/China) will review the case and recommand the engagement team to do more work. If it is a huge issue, the Global risk management team will review(this is bad as they normally do not have too much idea of how this business work and they tend to be super conservative) and would normally request the engagement team to perform some ridiculous work before they sign off the 10K, what is even worse, if in this timing you hire a forensic team(the other big4), they would want A LOT from that team.
In hindsight now Luo Ping and our fellow ihub members proves all the allegations are stupid, I think CCME shouldnt make such a big deal at the beginning to grab unnecessary attentions.
Did CCME used the wrong strategy?
In a hindsight, if I were running the CCME management I may not even do anything when citron and MW attacked. I mean, they knew those are stupid and false allegations, someone will find out the fact eventually(Deloitte, or Global Hunter now).
Now, I am not surprised to see a earnings delay because they engaged a third party(if they do what they say) to verify those allegations. In this situation and based on my experience, I assume they would engage another big4 auditor(E&Y, PwC or KPMG), which this party would need to spend A LOT of time to do those investigation(for those bus count thing i assume they need to do a lot of site visit), auditors(Deloitte) will then need to spend A LOT of time to evaluate this report(maybe also their risk management will force them to do more more work due to the Deloitte watch thing).
Maybe they just shouldnt do anything, make things low key and file the dang 10k quick to clear all concerns.
I would also wait until Luo Ping's on site report. Even this powerpoint is true, it could be just because the marketing department made some mistakes, it is not the first time they perform lousy work on public materials, remember their website before? ha!
Very good post Fernando, just pick any LCD TV in BestBuy and compare the cost of today vs 2008, that is an easy answer.
Wctbills already responded that
1. the tax is paid by Across but not Fujian
2. The Fujian Fenzhong tax returns are without chops by both party, how fake is it?!?!?!?!?
Is it the reason why CCME drops to $12??
Wao a tax return without any chops.....can they at least do some homework and fake a chop? I can create that thing in 5 minutes.
No they are still in the blackout period because clearly they didnt initiate the first buy back before(that is the rule). One thing they can do is immediately issue out the 2010 numbers(unaudited) and then they can start the buyback, but this case may not make DTT very happy. However, if we suddenly see CCME announcing their numbers we can be pretty certain that a buyback is following.
Just step back a while, I do think the Citron part 2 thing is a trap. The best case scenario for Citron is to frustrate CCME with the weak part 1 report and hope CCME will overreact and write a 10 pages essay to defend themselves. Then Citron can try to catch whatever careless mistake CCME write on that defensive hit to write their "part 2", also, once CCME react one time against such weak arguments, they can keep firing random points and CCME will need to react every single time, once CCME stop responding, they win the game.
Very well said about the SAIC issue, that is the Chinese culture.
I do not want to comment if he is lying or he overlooked, I use their official name on ccme's website to search.
Let me try my best to answer some of the questions.
I really don't understand how he cannot find the CCME posts, let me just paste some links here:
http://baike.baidu.com/view/2024705.htm
(like a WIKI of CCME)
http://money.163.com/11/0110/13/6Q1S72LT00253VNC.html
(163 is a very big web in china, talking about the Forbes number 1)
http://www.nmgecc.org/News/ShowNews.aspx?id=568
(Found from CCME website, about CCME's presence in mongolia)
and of course, many sites talk about the Forbes number 1 and the SWITOW project.
The second question is
http://www.shrmms.com/jianjie.asp
This is an official website of Shanghai People's Fine Art Publishing house, which is a very reputable company in shanghai, in its site it shows Appolo is its subsidiary, which means the claims of appolo is a random company is not true.
The chinese says the Investor Relations section just provide in English, which makes sense because there are not a lot of Chinese to trade in US listed companies.
Seriously dont understand what is the panic and the pps dropped that much. That guy has a track record of criminal and also pretty much none of his points are new/solid. I would be really surprised if management issue a very detailed statement to start a war with such report(or can I even call it a report?). Because I would imagine if Jacky issue a detail fight back report today, Andrew Left will use the points in the fight back report to create his part 2. I think the management's response is very appropriate in this situation because it doesnt need to create any unnecessary drama. As long as Deloitte didnt drop this client and Starr didnt sell out yet, I am very comfortable with this stock now.
$20 again...a slap to Citron's face
I simply dont think the MS coverage is that simple. I mean, these banks are not going to write the report for free, CCME needs to get to certain business commitment with them such as raising fund/dual listing to give them an incentive to initiate the report.
Suddenly I thought about the Lebron James commercial for the shorts: "what should I do? Should I admit I’d made mistakes?"
Oh, how does it work? So it can count the website's traffic?
Anyways, I do not think the SWITOW project can fly that quickly, as far as I know they just launched this project and only "test-driving" in certain airports, it is such a new thing to both Chinese and CCME and I think it needs at least 6-7 months to make it a very very profitable project. I do like the business model, though.
I just tried, but 1003 should be the customer service personnel ID...because it asked me if I want to talk to 1003 or 1002
Sorry forgot the link(In chinese only), it is in the right hand side.
http://www.forbeschina.com/
Wow! Forbes China ranked China MediaExpress as the number 1 in high potential companies.
It is just a normal share based compensation plan "framework" as of now, other than letting shareholders know they will be doing share based compensation(which I think is good for employee retention), nothing specific is announced yet I believe.
Viking you are correct that US is converting the US to IFRS, but their approach is doing it step by step, for example by changing some rules to closer to IFRS this year and than more next year. I need to go back and check if SEC is accepting IFRS reporting for certain international companies(I think under certain circumstances they can), but as far as I know CCME is still reporting under US GAAP, especially they are not even a foreign private issuer.
Based on my knowledge with big4(I am a CPA with one of the Big fours for years), here are some of my thoughts:
- In the United States, how auditors confirm a company's cash balance is by mailing a confirmation letter directly to the bank department and they will get back to you. In China, auditors actually needs to go to the bank themselves and ask the bank to print out the confirmation in front of them and sometimes it needs to the bank's management sign it off.
- To me the "China" way is much more effective in confirming the Cash balance, based on my understanding, CCME is using big name banks in China including Agricultural Bank of China(Listed company in Hong Kong and Shanghai) and HSBC. That makes me strongly believe the 10K cash amount is real, I mean, if you can make a fraud case by manipulating the employees/management of Agricultural Bank of China and HSBC to print and sign fake confirmations, that is the best fraud case in the world and you win.
This confirmation method I mentioned above is universal in Big4 with no exceptions.
And maybe I should add that she has daily access on CCME's book...
I believe Jacky means Sox(Sarbanes Oxley/internal controls) project which they need to issue a report this year(2nd year). There should be no reasons for Deloitte to work SARS with the management every week?
Even though I understand many of us here are waiting for the write up, but be respectful, Fernando doesn't owe you anything.