The below message is on YMB. It offers some specifics uncovered or alleged by the defendants Cheng and the Lin Brothers which were not mentioned in the articles circulating about the Starr Cayman II's lawsuit.
Finally: Behind the Scenes at CCME-- Arbitration Panel Findings and Revelations
We now know that CCME CEO Zheng Cheng claims to have personally sold to the underlying CME land development rights he personally owned in Shoushan (the "Shoushan Waterfall Project") for 150 times what he had paid for this same land rights four years earlier. The alleged payment was over $100,000,000 allegedly in installments of various unspecified amounts. CCME issued no 8k related to this alleged transaction. CCME said publicly that its activities were limited to ads on buses in China. Cheng purported later that the alleged purpose of the alleged sale was to create a Hollywood style destination for film industry of sorts. Cheng's explanation is nonsense. Cheng took the money and left shareholders with the bag, engaged in self-dealing, breached fiduciary duties, and lied. The Lin brothers aided in this activity and the transactions seem to have been supported by others acting in concert including Jacky Lam and Marco Kung. It would be interesting to know what law firm Loeb and Loeb did and did not know when acting on behalf of or in representation of any and all these fiduciaries. The arbitration panel found the Lin brothers and Cheng to have no credibility and found the testimony of Dorothy Dong to be impressive.
(Note the bio on the CCME.tv site mentions this Waterfall project) Zheng Cheng, Chief Executive Officer, President and Chairman
Mr. Cheng is the founder of CCME and has served as the Chairman of the Board of Directors and the Chief Executive Officer since its incorporation in 2002. He has over ten years' experience in enterprise management and is primarily in charge of the government relations, formulation of the growth strategies and management of the business. Prior to the establishment of CCME, he had held a number of senior executive positions in various government agencies, state-owned enterprises and other companies, including the agriculture department of the Chinese Communist Youth League in Yunnan Province, Yunnan Qingnian Xinchangzheng Trading Company, Fuzhou Shoushan Waterfall Group EM Polder Co., Ltd., Fuzhou Electronics Mall Co., Ltd. and Fuzhou Mandefu Food Co., Ltd. He is also a philanthropist dedicated to community development in China. In 2002, he was recognized by the Industry and Commerce Association in Fuzhou for his reputation for charity and assistance of children in need of education. He launched activities to raise funds to help relieve damage resulting from the earthquake in Sichuan in May 2008. In 2005, he was awarded Fuzhou Distinguished Young Entrepreneur of the Year. In addition, he currently serves as the vice president of Fuzhou Advertising Association, as well as the vice president of the Industry and Commerce Association of Jin'an District and Gulou District of Fuzhou. He is also a director in the standing committee of Fuzhou Industry and Commerce Association, the Sixth Political Consultative Conference Committee of Jin'an District of Fuzhou, and the Fujian Entrepreneurs' Association. Further, he is a visiting professor of Minjiang College who teaches subjects relating to the advertising industry in China. Mr. Cheng received his bachelor degree in economics from Yunnan University in China in 1994.)
(The above paragraph was not in the Yahoo message)
Cheng also claimed that he had "invested money in an Internet business and had incurred $50 million in losses that were not explained."
Yet the panel found that "CME failed to produce a single bank statement, certified by a the bank as correct, evidencing these transactions or any other transactions."
For those of you who may have forgotten, CME housed the operations of what investors came to know as former ticker CCME.
In retrospect, the shorts threw the kitchen sink in accusations and won the war against CCME, which protected future investors from being scammed. Nice job shorts. The longs relied on an audit by DTT and the plausibility of the business model, among other things. IMHO, this business model could have worked if this was not run by greedy SOB gutter trash.
No short ever alleged these actual hidden transactions, so in this sense the shorts lose a little bit of credit in the grand scheme of things. Or Cheng made up these stories about the land and provided a forged document, in which case the brownie points are not lost after all.
A remaining question: Wonder who tipped off the shorts first? If shorts knew, how could Loeb and Loeb not have known?
What a great killing this was for the shorts and what fun, knowing eventually you will be right no matter what you allege is awry.
Source (informal citation style): The Arbitration "Final Awards" No HKIAC/A11030 (Starr Cayman II v. China MediaExpress Holdings, Inc. Et al.) Filed 1/15/13
No retrospective would be complete here without reference to: Andrew Left, Muddy Waters, Geoinvesting, Omamy's Mamie, "Skeedady!!!!!" Seasaw6499 (accept no imitation, always insist on the genuine product), and everyone's favorite, Don Monfort. Bravo!
