China MediaExpress Holdings, Inc. (fka CCME)

[Shermadog]

This keeps coming up, I'm sorry if I missed it, but has anyone had a rebuttle to this statement by Muddy Waters? Has anyone tried to contact the company? This keeps getting brought up in these blogs by shorts:

We spoke with the largest operator in the CTR report, Shanghai Ba Shi about CCME. Ba Shi told us that it never had a business relationship with CCME.




Also as far as the SAIC numbers not matching, MW actually already brought that up in their report by stating.

Note that the SAIC financial statements of the operating company, Fujian Focus Media Co. Ltd., show 2009 revenue of $760,000 (generating a net loss of $920,000), and 2008 revenue of $337,000 (generating a net loss of $890,000).

As far as refuting it, Geoinvesting already did by saying,

The net income of the VIE flows through the FIE to the foreign holding company (in the U.S.). SAIC does not require audited financial documents for VIE.

http://geoinvesting.com/forums/yaf_postsm3816_Review-of-Chinese-US-Listed-Company-Ownership-Stru.aspx#singleMsg

B) SAIC do not match SEC files. Less than stellar credit report.

Possible rebuttal that investors may pose

CCME corporate structure is a variable interest entity (VIE). SAIC filings for VIE are not audited and thus can't definitively indicate that fraud is present.

The due diligence process carried out by Starr International, with regards to a private placement, was extensive.

The $17.6 million dividend payment to Cheng Zheng on February 5, 2009 shows that the company had a substantial amount of cash going into 2009, proving SAIC filings are useless:

"For the year ended December 31, 2009, HKMDF approved a cash dividend payment of $17.6 million to the founder shareholders On February 5, 2009, the board of directors of HKMDF approved and paid a dividend of $17,570 (equivalent to RMB120 million) or $1,757 per share (before the effect of Share Exchange) payable to Cheng Zheng, the sole shareholder of HKMDF at the date of dividend declaration. "

http://geoinvesting.com/companies/ccme_china_mediaexpress_holdin/research