Where does management's best interest lie? We can safely assume that they will do whatever is in their (and not our) best interest. We know that management owns around 80% of the company's shares. We also know that there is a real business behind all this accounting BS (at least it would seem so, given how many people have seen the buses and the ads, the fact that they are currently hiring, the testimony of sales reps for the company and outside contractors, etc. How profitable the business is (if at all) we don't know. I think we can assume there is a good chance it is at least marginally profitable, even if not to the extent the company claimed.
Unless Zheng has been selling his shares without declaring so (which is a legitimate possibility), he is still sitting on a pile of shares that could be worth a huge amount, or very little, depending on what actions he takes. Does he try to salvage what is real in the company, clean up the books, and start rebuilding his net worth towards what it was a few months ago -- or does he let the company go to the pinks and drop to a buck or less (and his net worth along with it)?
I think the answer depends on two questions:
1) Is the company viable enough to be worth salvaging, and the finances cleaned up?
2) Does Zheng still own his shares?
I think we will have a clearer idea of the answer by tomorrow. If the CEO looks to be making a real effort to conduct a forensic audit and retain the company's listing, there is a chance our interests can align with his and the company's status can be rehabilitated.
If we hear nothing from the company by tomorrow, we'll have a definitive answer in the opposite direction.
