China Gaoxian   

ChinaGaoxian

I think they really need the funds for expansion. Somehow managed to pump until 0.40 plus. At least they never run road when their share price is at its peak. Debut lao sai only the BBs sellers themselves know.

rotijai      ( Date: 26-Mar-2011 20:24) Posted: cgx already trapped many several times.. tat time during the KRX debut, the TA looked good also.. i have a feeling tat it's a scandal/scam.. but i might be wrong hpong5      ( Date: 26-Mar-2011 19:02) Posted: Audit issues nothing to do with technical charts pattern. The chart actually from a technical point looks safe for entry. Too bad the audit issues brought it down further

 

cgx already trapped many several times..

tat time during the KRX debut, the TA looked good also..

i have a feeling tat it's a scandal/scam..

but i might be wrong

hpong5      ( Date: 26-Mar-2011 19:02) Posted: Audit issues nothing to do with technical charts pattern. The chart actually from a technical point looks safe for entry. Too bad the audit issues brought it down further. stan19      ( Date: 26-Mar-2011 18:53) Posted: FA?... mind to elaborate

 

Audit issues nothing to do with technical charts pattern. The chart actually from a technical point looks safe for entry. Too bad the audit issues brought it down further.

stan19      ( Date: 26-Mar-2011 18:53) Posted: FA?... mind to elaborate? hpong5      ( Date: 26-Mar-2011 18:33) Posted: Now is panic selling. More of FA a concern

 

FA?... mind to elaborate?

hpong5      ( Date: 26-Mar-2011 18:33) Posted: Now is panic selling. More of FA a concern. Bintang      ( Date: 26-Mar-2011 17:20) Posted: Investors must to take profits or cut losses when DIs were negatively crossed n ADX fell sharply from 56 0n 25 Jan2011 , then the share price was between 34 to 41 cents . This level was below the stop loss protection from the peak at 47 cents . Therefore all counters with open positions must have stop loss protections

 

Just a wild guess...should resume trading by mid april. :p

 

Now is panic selling. More of FA a concern.

Bintang      ( Date: 26-Mar-2011 17:20) Posted: Investors must to take profits or cut losses when DIs were negatively crossed n ADX fell sharply from 56 0n 25 Jan2011 , then the share price was between 34 to 41 cents . This level was below the stop loss protection from the peak at 47 cents . Therefore all counters with open positions must have stop loss protections . Bintang      ( Date: 17-Feb-2011 11:45) Posted: ChinaGaoxian fell sharply after forming a weekly shooting star on 07 Jan , ADX has peaked at 56 on 13 Jan . It came down rapidly on 25 Jan when daily RSI shown the divergence . And at the same time , DIs made a negative cross over . All these signals showed its uptrend had ended , n so was the starting of the downtrend . The strong support is now at 23.5 cents . There are too many resistances ahead , sell into strength when there is a technical rebounce

 

Investors must to take profits or cut losses when DIs were negatively crossed n ADX fell sharply from 56 0n 25 Jan2011 , then the share price was between 34 to 41 cents . This level was below the stop loss protection from the peak at 47 cents . Therefore all counters with open positions must have stop loss protections .

Bintang      ( Date: 17-Feb-2011 11:45) Posted: ChinaGaoxian fell sharply after forming a weekly shooting star on 07 Jan , ADX has peaked at 56 on 13 Jan . It came down rapidly on 25 Jan when daily RSI shown the divergence . And at the same time , DIs made a negative cross over . All these signals showed its uptrend had ended , n so was the starting of the downtrend . The strong support is now at 23.5 cents . There are too many resistances ahead , sell into strength when there is a technical rebounce . Bon3260      ( Date: 17-Feb-2011 08:08) Posted: I repeat... Sell ChinaGaoxian when rebounce... ('',) Note: ChinaGaoxian as @ 16-Feb-2011 close 0.270

 

Yup, that's right. Most important is the major shareholders like the ceo never dump shares and company is not sitting on huge debt, sales are good and improving, the fundamentals of the company should be fine. Like i say, ceo and other major shareholders never reduce their stake besides earlier that time shows that they are doing serious business. Is unfortunate that the audit issues caused the selloff and suspension as BBs are also scared. But one thing for sure, they have sold or shorted on leaked information. It's safer to sell first for them as i believe they must have collected a lot when the price dropped from 0.40 to 0.22. Suay suay, they heard this kind of leaks of course sell and sell leading to the sharp price plunge coupled with super volume.

stan19      ( Date: 26-Mar-2011 13:01) Posted: even they sell to public in open market... they will announce changed of holding? hpong5      ( Date: 26-Mar-2011 12:34) Posted: Should have. The easier way is to check on the SGX's Companies' Announcement page for any change in the substantial shareholders' shareholding. Maybe you can check from the date they listed in SGX till now

 

From the posts, I can see many here are vested in this counter and hoping for positive results and pulling out with hopefully postive cash invested.

This is sad but true:

1) Don't wait for it to rise back to the level you have bought. If you don't have a cut-loss limit, you should think seriously about it now. (0 % return is really bad.. )

2) The CEO and all his friends are still humans. IF they have reduce their holdings, things are not as rosy as you hope it will be.

3) Did you know the volume before the halt on monday? 139 million shares changed hands.. for a penny stock this is note worthy.. Who have unloaded till 19c? No need to guess.. see the numbers and they will give you a clear indicator.. I doubt there are enough scripts for those CFDs shorties. So you should know what I am trying to say here.

All the best ^^

 

hpong5      ( Date: 26-Mar-2011 16:06) Posted: 中 国 高 纤 未 经 股 东 批 准 擅 将 资 金 投 入 上 游 项 目 （ 2011-03-26） 早 报 导 读 [新 加 坡 大 选 ] 三 巴 旺 竞 选 团 队 或 出 现 两 新 脸 孔 [日 本 大 地 震 ] 辐 射 尘 已 达 美 欧 将 绕 地 球 一 周 [利 比 亚 局 势 ] 从 "禁 飞 "看 奥 巴 马 "玩 火 " [中 国 早 点 ] 台 湾 新 政 治 文 化 起 跑 ？ 联 合 早 报 网 招 聘 Freelance网 络 新 闻 编 辑 ● 王 阳 发 　 　 因 无 法 确 定 中 国 子 公 司 银 行 存 款 余 额 而 刚 开 始 停 牌 的 中 国 高 纤 （ China Gaoxian） ， 昨 日 再 爆 未 经 股 东 批 准 便 把 为 数 不 明 的 资 金 投 入 上 游 项 目 。 审 计 师 正 扩 大 审 计 范 围 ， 将 确 认 有 关 资 金 投 入 的 时 间 、 数 额 以 及 其 他 详 情 。 　 　 该 公 司 正 准 备 在 4月 召 开 特 别 股 东 大 会 ， 寻 求 股 东 批 准 上 游 扩 充 项 目 。 但 按 新 交 所 挂 牌 条 例 ， 该 公 司 必 须 先 获 得 股 东 批 准 ， 才 能 够 进 行 这 类 项 目 。 　 　 中 国 高 纤 的 审 计 委 员 会 昨 日 是 在 答 复 韩 国 交 易 所 （ KRX） 的 询 问 时 ， 披 露 以 上 它 前 天 要 求 股 票 停 牌 时 未 说 明 的 原 因 。 中 国 高 纤 的 审 计 委 员 会 前 天 要 求 股 票 停 牌 时 ， 只 表 示 因 为 审 计 师 无 法 确 认 或 证 明 中 国 高 纤 的 两 家 中 国 子 公 司 的 银 行 存 款 余 额 。 　 　 2009年 在 新 交 所 挂 牌 上 市 的 中 国 高 纤 ， 今 年 1月 刚 在 韩 国 交 易 所 发 行 存 托 凭 证 （ KDR） ， 但 获 得 第 二 个 交 易 所 的 审 核 看 来 并 不 能 保 障 任 何 公 司 的 财 务 健 康 或 企 业 监 管 水 平 。 　 　 中 国 高 纤 本 周 一 由 于 其 股 票 暴 跌 24％ （ 跌 6分 ， 股 价 收 报 0.19元 ） 而 且 交 易 量 飙 升 达 1亿 4000万 股 ， 而 遭 新 交 所 询 问 。 它 这 才 要 求 股 票 周 二 开 始 暂 停 交 易 ， 以 待 发 布 消 息 。 但 它 并 没 同 时 暂 停 其 韩 国 存 托 凭 证 的 交 易 ， 以 致 该 韩 国 存 托 凭 证 的 价 格 在 周 二 大 跌 15％ ， 报 4165韩 元 （ 每 1存 托 凭 证 等 于 20股 ） 。 　 　 这 因 此 导 致 市 场 观 察 者 推 测 ， 已 有 人 因 担 心 出 现 类 似 其 他 龙 筹 股 的 账 目 问 题 而 慌 忙 抛 售 。 中 国 高 纤 之 后 在 周 四 果 然 透 露 有 关 的 银 行 存 款 余 额 问 题 ， 并 进 一 步 要 求 停 牌 。 　 　 它 周 四 表 示 ， 中 国 高 纤 的 审 计 师 安 永 （ Ernst & Young） 是 在 审 计 去 年 业 绩 时 ， 无 法 确 认 或 证 明 中 国 高 纤 两 家 中 国 子 公 司 的 银 行 存 款 余 额 。 有 关 中 国 子 公 司 是 浙 江 华 港 涤 纶 实 业 有 限 公 司 及 福 建 新 华 威 化 纤 染 织 有 限 公 司 。 　 　 该 公 司 的 审 计 委 员 会 在 昨 日 答 复 韩 交 所 针 对 资 金 是 否 已 投 入 于 上 游 扩 充 项 目 的 问 题 时 则 透 露 ， 中 国 高 纤 执 行 主 席 兼 总 裁 曹 祥 彬 已 通 知 审 计 委 员 会 ， 虽 然 说 股 东 还 没 批 准 进 行 该 项 目 ， 集 团 的 资 金 已 经 用 于 该 上 游 扩 充 项 目 （ 原 材 料 聚 酯 生 产 项 目 ） 。 　 　 但 它 并 没 透 露 已 投 入 于 该 上 游 项 目 的 资 金 究 竟 多 少 。 中 国 高 纤 的 审 计 委 员 会 在 答 复 中 仅 表 示 ， 审 计 师 正 扩 大 审 计 范 围 ， 以 确 认 有 关 资 金 投 入 的 时 间 、 数 额 以 及 其 他 详 情 。

 

中 国 高 纤 未 经 股 东 批 准 擅 将 资 金 投 入 上 游 项 目 （ 2011-03-26） 早 报 导 读 [新 加 坡 大 选 ] 三 巴 旺 竞 选 团 队 或 出 现 两 新 脸 孔 [日 本 大 地 震 ] 辐 射 尘 已 达 美 欧 将 绕 地 球 一 周 [利 比 亚 局 势 ] 从 "禁 飞 "看 奥 巴 马 "玩 火 " [中 国 早 点 ] 台 湾 新 政 治 文 化 起 跑 ？ 联 合 早 报 网 招 聘 Freelance网 络 新 闻 编 辑 ● 王 阳 发 　 　 因 无 法 确 定 中 国 子 公 司 银 行 存 款 余 额 而 刚 开 始 停 牌 的 中 国 高 纤 （ China Gaoxian） ， 昨 日 再 爆 未 经 股 东 批 准 便 把 为 数 不 明 的 资 金 投 入 上 游 项 目 。 审 计 师 正 扩 大 审 计 范 围 ， 将 确 认 有 关 资 金 投 入 的 时 间 、 数 额 以 及 其 他 详 情 。 　 　 该 公 司 正 准 备 在 4月 召 开 特 别 股 东 大 会 ， 寻 求 股 东 批 准 上 游 扩 充 项 目 。 但 按 新 交 所 挂 牌 条 例 ， 该 公 司 必 须 先 获 得 股 东 批 准 ， 才 能 够 进 行 这 类 项 目 。 　 　 中 国 高 纤 的 审 计 委 员 会 昨 日 是 在 答 复 韩 国 交 易 所 （ KRX） 的 询 问 时 ， 披 露 以 上 它 前 天 要 求 股 票 停 牌 时 未 说 明 的 原 因 。 中 国 高 纤 的 审 计 委 员 会 前 天 要 求 股 票 停 牌 时 ， 只 表 示 因 为 审 计 师 无 法 确 认 或 证 明 中 国 高 纤 的 两 家 中 国 子 公 司 的 银 行 存 款 余 额 。 　 　 2009年 在 新 交 所 挂 牌 上 市 的 中 国 高 纤 ， 今 年 1月 刚 在 韩 国 交 易 所 发 行 存 托 凭 证 （ KDR） ， 但 获 得 第 二 个 交 易 所 的 审 核 看 来 并 不 能 保 障 任 何 公 司 的 财 务 健 康 或 企 业 监 管 水 平 。 　 　 中 国 高 纤 本 周 一 由 于 其 股 票 暴 跌 24％ （ 跌 6分 ， 股 价 收 报 0.19元 ） 而 且 交 易 量 飙 升 达 1亿 4000万 股 ， 而 遭 新 交 所 询 问 。 它 这 才 要 求 股 票 周 二 开 始 暂 停 交 易 ， 以 待 发 布 消 息 。 但 它 并 没 同 时 暂 停 其 韩 国 存 托 凭 证 的 交 易 ， 以 致 该 韩 国 存 托 凭 证 的 价 格 在 周 二 大 跌 15％ ， 报 4165韩 元 （ 每 1存 托 凭 证 等 于 20股 ） 。 　 　 这 因 此 导 致 市 场 观 察 者 推 测 ， 已 有 人 因 担 心 出 现 类 似 其 他 龙 筹 股 的 账 目 问 题 而 慌 忙 抛 售 。 中 国 高 纤 之 后 在 周 四 果 然 透 露 有 关 的 银 行 存 款 余 额 问 题 ， 并 进 一 步 要 求 停 牌 。 　 　 它 周 四 表 示 ， 中 国 高 纤 的 审 计 师 安 永 （ Ernst & Young） 是 在 审 计 去 年 业 绩 时 ， 无 法 确 认 或 证 明 中 国 高 纤 两 家 中 国 子 公 司 的 银 行 存 款 余 额 。 有 关 中 国 子 公 司 是 浙 江 华 港 涤 纶 实 业 有 限 公 司 及 福 建 新 华 威 化 纤 染 织 有 限 公 司 。 　 　 该 公 司 的 审 计 委 员 会 在 昨 日 答 复 韩 交 所 针 对 资 金 是 否 已 投 入 于 上 游 扩 充 项 目 的 问 题 时 则 透 露 ， 中 国 高 纤 执 行 主 席 兼 总 裁 曹 祥 彬 已 通 知 审 计 委 员 会 ， 虽 然 说 股 东 还 没 批 准 进 行 该 项 目 ， 集 团 的 资 金 已 经 用 于 该 上 游 扩 充 项 目 （ 原 材 料 聚 酯 生 产 项 目 ） 。 　 　 但 它 并 没 透 露 已 投 入 于 该 上 游 项 目 的 资 金 究 竟 多 少 。 中 国 高 纤 的 审 计 委 员 会 在 答 复 中 仅 表 示 ， 审 计 师 正 扩 大 审 计 范 围 ， 以 确 认 有 关 资 金 投 入 的 时 间 、 数 额 以 及 其 他 详 情 。

 

That writer is comparing FerroChina's huge debt with Gaoxian's peanuts debt. A "bit" poor judgement of that writer.

 

For those who wants to know who is the major shareholder, please refer to their last year annual report. Top 20 shareholders constitute 86% of which their CEO owns more than 50% of his own company and following carry luck. But Carry Luck reduced significantly. So think he still holding alot.

hpong5      ( Date: 26-Mar-2011 12:34) Posted: Should have. The easier way is to check on the SGX's Companies' Announcement page for any change in the substantial shareholders' shareholding. Maybe you can check from the date they listed in SGX till now. stan19      ( Date: 26-Mar-2011 12:30) Posted: anyway to check whos the current major shareholder? eg. the company name etc...

 

Is tat  part of the condition to appoint e& y as auditor  for them to list  on sgx?

As what KRX query, why they able to expand new production factory,acquiring land  without going thru meeting?

 

rabbitfoot      ( Date: 26-Mar-2011 13:34) Posted: My final take on CGX : 1. Why did CGX, Hongxing and the other H chose world no. 1   E& Y as their Auditor, unlike lesser known auditor engaged by other S-chips ,  knowing that they will fully checked in the first place ?  2.  CGX has ID Chan (ex-SGX listing top guy) to head their audit committee and giving all the answers to SGX, KRX queries. 3. Coming Apr, EGM to be held to approve new Upstream factory. CGX said money already put in. Plot of land already acquired. If attend EGM, can see Chairman there. 4. Using ipo money, CGX bought hundereds & hundreds of sewing machines/kits delivered in phases last year. One investor even visited their factory just before CNY this year and saw them operating full swing. 5. Big boss selling shares just after ipo. Not unusual but common, as others also do it. Need money for own use. At least, not selling at  0.40.... I rest my case.

 

How true.......before this incident.....so many analysts said gaoxian good ....gaoxian must buy....gaoxian all clear...

zhixuen      ( Date: 26-Mar-2011 14:47) Posted: All of these analyst like to act like " 事 后 孔 明 " flyersummer      ( Date: 26-Mar-2011 10:03) Posted: Mar 26, 2011 NEWS ANALYSIS China Gaoxian scandal evokes chilling parallels Similarities with FerroChina scandal in 2008 a scary reminder to stay vigilant By Goh Eng Yeow, Senior Correspondent China Gaoxian founder Cao Xiangbin sold 60 million shares at the point of listing. IT MAY look like just another S-chip train wreck, but the accounting irregularities raised at textile maker China Gaoxian are far more worrying. While China Hongxing Sports and Hongwei Technologies, which both reported accounting problems last month, listed more than five years ago, China Gaoxian made its debut only 18 months ago. This makes this latest S-chip scandal all the more serious, because China Gaoxian listed six months after clean-up measures were implemented following a spate of earlier S-chip irregularities. As one of the biggest IPOs of 2009, China Gaoxian was supposed to flag an all-clear signal to investors that it was back to business as usual for S-chips. After all, its independent directors included Mr Philip Chan, a former listings head with the Singapore Exchange. In January, China Gaoxian rode high on a strong vote of investor confidence to raise $240 million from South Korean investors after getting its stock sponsored as a depository receipt listing in Seoul. So its trading suspension this week is a big blow to the already tarnished S-chip sector and may sound the death knell for similar fund-raising exercises by other S-chips in Seoul. It is also worth noting the interesting parallels between China Gaoxian and steel-coil maker FerroChina, which was suspended from trading more than two years ago. Just to jolt the memory, FerroChina was also riding high with investors when it suddenly closed shop in October 2008, purportedly because banks refused to roll-over its short-term loans. But as some traders noted, the warning signals had been there for years, if anyone had cared to look. Company insiders had been whittling down their stakes, selling about 155 million shares, or 18 per cent of the company, between 2005 and 2008. And as a company purportedly sitting on a huge cash hoard, it had short-term debts of 2.33 billion yuan, with banks taking literally everything - bank deposits, inventories, buildings - as collateral for their loans. Now take a look at China Gaoxian and one will notice more than a passing resemblance to FerroChina. The company's 2009 prospectus showed that executive chairman and founder Cao Xiangbin sold 60 million shares at the IPO issue price of 26 cents apiece at the point of listing. A year later when the lock-up period ended for major shareholders, Carry Luck, a company owned by one Mr Hong Rong Zhi, lost no time in selling out too. In just two days last September, Carry Luck sold 53 million shares at 19.5 cents apiece and another 25.1 million shares at 19 cents each - both well below the 26-cent listing price. The sales took Carry Luck's stake to 4.99 per cent from 10.42 per cent. Another telling sign: the company had raised $78.2 million from its IPO here in 2009 and another $223.8 million from selling 600 million new shares in Seoul in January. Yet, like FerroChina, it had behaved like a cash-strapped firm, asking customers to pay up in cash and drawing down on its bank credit lines. It was this contradiction that prompted the SGX to put a query to the company. In hindsight, investors should have asked why China Gaoxian needed to raise so much cash over such a short period if its growth was self-sustaining. And what happens to that huge sum now? Is it still in the company's coffers? And shouldn't a question have been asked about the huge sales of China Gaoxian stock by a major shareholder last September, at below the IPO issue price? It is strange that irregularities could surface at China Gaoxian with FerroChina scandal still fresh in investors' minds. And it is a chilling reminder to all investors to stay vigilant at all times. engyeow@sph.com.sg

 

Quote " Yet, like FerroChina, it had behaved like a cash-strapped firm, asking customers to pay up in cash and drawing down on its bank credit lines. "

This is what a elite can do. I am really amused. You mean you have got alot of cash, and you don't have to ask your customers to pay their outstandings...

People like this joker sit in the office, write something by the books, but never make business sense...

zhixuen      ( Date: 26-Mar-2011 14:47) Posted: All of these analyst like to act like " 事 后 孔 明 " flyersummer      ( Date: 26-Mar-2011 10:03) Posted: Mar 26, 2011 NEWS ANALYSIS China Gaoxian scandal evokes chilling parallels Similarities with FerroChina scandal in 2008 a scary reminder to stay vigilant By Goh Eng Yeow, Senior Correspondent China Gaoxian founder Cao Xiangbin sold 60 million shares at the point of listing. IT MAY look like just another S-chip train wreck, but the accounting irregularities raised at textile maker China Gaoxian are far more worrying. While China Hongxing Sports and Hongwei Technologies, which both reported accounting problems last month, listed more than five years ago, China Gaoxian made its debut only 18 months ago. This makes this latest S-chip scandal all the more serious, because China Gaoxian listed six months after clean-up measures were implemented following a spate of earlier S-chip irregularities. As one of the biggest IPOs of 2009, China Gaoxian was supposed to flag an all-clear signal to investors that it was back to business as usual for S-chips. After all, its independent directors included Mr Philip Chan, a former listings head with the Singapore Exchange. In January, China Gaoxian rode high on a strong vote of investor confidence to raise $240 million from South Korean investors after getting its stock sponsored as a depository receipt listing in Seoul. So its trading suspension this week is a big blow to the already tarnished S-chip sector and may sound the death knell for similar fund-raising exercises by other S-chips in Seoul. It is also worth noting the interesting parallels between China Gaoxian and steel-coil maker FerroChina, which was suspended from trading more than two years ago. Just to jolt the memory, FerroChina was also riding high with investors when it suddenly closed shop in October 2008, purportedly because banks refused to roll-over its short-term loans. But as some traders noted, the warning signals had been there for years, if anyone had cared to look. Company insiders had been whittling down their stakes, selling about 155 million shares, or 18 per cent of the company, between 2005 and 2008. And as a company purportedly sitting on a huge cash hoard, it had short-term debts of 2.33 billion yuan, with banks taking literally everything - bank deposits, inventories, buildings - as collateral for their loans. Now take a look at China Gaoxian and one will notice more than a passing resemblance to FerroChina. The company's 2009 prospectus showed that executive chairman and founder Cao Xiangbin sold 60 million shares at the IPO issue price of 26 cents apiece at the point of listing. A year later when the lock-up period ended for major shareholders, Carry Luck, a company owned by one Mr Hong Rong Zhi, lost no time in selling out too. In just two days last September, Carry Luck sold 53 million shares at 19.5 cents apiece and another 25.1 million shares at 19 cents each - both well below the 26-cent listing price. The sales took Carry Luck's stake to 4.99 per cent from 10.42 per cent. Another telling sign: the company had raised $78.2 million from its IPO here in 2009 and another $223.8 million from selling 600 million new shares in Seoul in January. Yet, like FerroChina, it had behaved like a cash-strapped firm, asking customers to pay up in cash and drawing down on its bank credit lines. It was this contradiction that prompted the SGX to put a query to the company. In hindsight, investors should have asked why China Gaoxian needed to raise so much cash over such a short period if its growth was self-sustaining. And what happens to that huge sum now? Is it still in the company's coffers? And shouldn't a question have been asked about the huge sales of China Gaoxian stock by a major shareholder last September, at below the IPO issue price? It is strange that irregularities could surface at China Gaoxian with FerroChina scandal still fresh in investors' minds. And it is a chilling reminder to all investors to stay vigilant at all times. engyeow@sph.com.sg

 

All of these analyst like to act like " 事 后 孔 明 "

flyersummer      ( Date: 26-Mar-2011 10:03) Posted: Mar 26, 2011 NEWS ANALYSIS China Gaoxian scandal evokes chilling parallels Similarities with FerroChina scandal in 2008 a scary reminder to stay vigilant By Goh Eng Yeow, Senior Correspondent China Gaoxian founder Cao Xiangbin sold 60 million shares at the point of listing. IT MAY look like just another S-chip train wreck, but the accounting irregularities raised at textile maker China Gaoxian are far more worrying. While China Hongxing Sports and Hongwei Technologies, which both reported accounting problems last month, listed more than five years ago, China Gaoxian made its debut only 18 months ago. This makes this latest S-chip scandal all the more serious, because China Gaoxian listed six months after clean-up measures were implemented following a spate of earlier S-chip irregularities. As one of the biggest IPOs of 2009, China Gaoxian was supposed to flag an all-clear signal to investors that it was back to business as usual for S-chips. After all, its independent directors included Mr Philip Chan, a former listings head with the Singapore Exchange. In January, China Gaoxian rode high on a strong vote of investor confidence to raise $240 million from South Korean investors after getting its stock sponsored as a depository receipt listing in Seoul. So its trading suspension this week is a big blow to the already tarnished S-chip sector and may sound the death knell for similar fund-raising exercises by other S-chips in Seoul. It is also worth noting the interesting parallels between China Gaoxian and steel-coil maker FerroChina, which was suspended from trading more than two years ago. Just to jolt the memory, FerroChina was also riding high with investors when it suddenly closed shop in October 2008, purportedly because banks refused to roll-over its short-term loans. But as some traders noted, the warning signals had been there for years, if anyone had cared to look. Company insiders had been whittling down their stakes, selling about 155 million shares, or 18 per cent of the company, between 2005 and 2008. And as a company purportedly sitting on a huge cash hoard, it had short-term debts of 2.33 billion yuan, with banks taking literally everything - bank deposits, inventories, buildings - as collateral for their loans. Now take a look at China Gaoxian and one will notice more than a passing resemblance to FerroChina. The company's 2009 prospectus showed that executive chairman and founder Cao Xiangbin sold 60 million shares at the IPO issue price of 26 cents apiece at the point of listing. A year later when the lock-up period ended for major shareholders, Carry Luck, a company owned by one Mr Hong Rong Zhi, lost no time in selling out too. In just two days last September, Carry Luck sold 53 million shares at 19.5 cents apiece and another 25.1 million shares at 19 cents each - both well below the 26-cent listing price. The sales took Carry Luck's stake to 4.99 per cent from 10.42 per cent. Another telling sign: the company had raised $78.2 million from its IPO here in 2009 and another $223.8 million from selling 600 million new shares in Seoul in January. Yet, like FerroChina, it had behaved like a cash-strapped firm, asking customers to pay up in cash and drawing down on its bank credit lines. It was this contradiction that prompted the SGX to put a query to the company. In hindsight, investors should have asked why China Gaoxian needed to raise so much cash over such a short period if its growth was self-sustaining. And what happens to that huge sum now? Is it still in the company's coffers? And shouldn't a question have been asked about the huge sales of China Gaoxian stock by a major shareholder last September, at below the IPO issue price? It is strange that irregularities could surface at China Gaoxian with FerroChina scandal still fresh in investors' minds. And it is a chilling reminder to all investors to stay vigilant at all times. engyeow@sph.com.sg

 

some of these $ arent legal anyway..

they dont mind selling at a loss cause the $ wasnt theirs at the beginning.

so they pumped in the dirty $ and washed it clean.

Jackpot2010      ( Date: 26-Mar-2011 13:29) Posted: If u hold < 5% then no need to make announcement. But some of these " small" holders could be proxy for the BBs - enable BBs to hide behind the scene to avoid detection when they sell down. Our sgx are mere " clerical" workers to  permit such irregularities to continue repeatedly - useless and clueless to say the least!

 

My final take on CGX :

1. Why did CGX, Hongxing and the other H chose world no. 1   E& Y as their Auditor, unlike lesser known auditor engaged by other S-chips ,  knowing that they will fully checked in the first place ? 

2.  CGX has ID Chan (ex-SGX listing top guy) to head their audit committee and giving all the answers to SGX, KRX queries.

3. Coming Apr, EGM to be held to approve new Upstream factory. CGX said money already put in. Plot of land already acquired. If attend EGM, can see Chairman there.

4. Using ipo money, CGX bought hundereds & hundreds of sewing machines/kits delivered in phases last year. One investor even visited their factory just before CNY this year and saw them operating full swing.

5. Big boss selling shares just after ipo. Not unusual but common, as others also do it. Need money for own use. At least, not selling at  0.40....

I rest my case.

 

 

 

 

If u hold < 5% then no need to make announcement. But some of these " small" holders could be proxy for the BBs - enable BBs to hide behind the scene to avoid detection when they sell down. Our sgx are mere " clerical" workers to  permit such irregularities to continue repeatedly - useless and clueless to say the least!