Interesting development.I doubt if Naibu or any of the other "China Frauds" actually ever had the business or cash balances claimed but action against UK parties who were involved in Naibu's IPO and business advice could be interesting as a number of these people were involved in other of the failed China based AIM listed businesses.
Naibu Global International Company plc (or "the Company")
The Board of Naibu Global Investment Company Plc ("Naibu" or "the Company") wishes to update shareholders as follows.
Since its last announcement on 10 December, 2016, the Board of Naibu, which now comprises Giles Elliott, David Thomas and Stephen Cheung (the "Board" or the "NEDs"), has been pursuing a number of initiatives, which are detailed below.
Numerous attempts have been made to contact Lin Huoyan and Lin Congdeng, who were the Chinese Executive Directors of the Company (the "Chinese Directors"), without success. Neither individual has responded to any approach, and neither are traceable via any of the addresses which they have supplied to the Board in the past. Lin Huoyan has, however, responded to legal notices issued through a newspaper advertisement (see below), but he is effectively hiding his residential address from the Board, making it very difficult to serve him with legal documentation. Consequently, the Chinese Directors have now been removed from the Board of Naibu.
In order to take control of Naibu's underlying businesses, the Board proceeded to initiate actions to take control of Naibu (H.K) International Investment Limited ("Naibu HK"), the intermediate holding company and 100% subsidiary of Naibu, registered in Hong Kong and of Naibu China Limited ("Naibu China"), the underlying Chinese subsidiary, registered in the People's Republic of China ("PRC") and 100% owned by Naibu HK. In February 2015, the Board passed a resolution removing Lin Huoyan, Lin Congdeng and Lin Zhenzhi (Lin Huoyan's sister and Lin Congdeng's wife) from the Board of Naibu HK and appointing the NEDs to the Board of Naibu HK.
In June 2015, as required under the laws of the PRC ("PRC Law"), the NEDs, through Naibu HK, issued legal proceedings in China to remove Lin Huoyan, Lin Congdeng and Lin Zhenzhi, as directors of Naibu China. During the course of this litigation, representations were made to the Chinese Courts, by parties associated with Lin Huoyan, that Naibu HK no longer wished to proceed with the litigation on the basis that Lin Huoyan was now in control of Naibu HK. This assertion, however, was a result of Lin Huoyan, or parties associated with him, filing forged papers with the Hong Kong Companies Registry, purporting that the NEDs had resigned as directors from Naibu HK and Lin Huoyan had reappointed himself as a director of Naibu HK. As a result, and to correct the forged filings, the NEDs also initiated litigation in Hong Kong, the details of which are set out below. This litigation has in turn delayed the litigation in China. The Chinese Court has now ruled in favour of Naibu HK, and the Board is now taking steps to take full control of the Chinese subsidiary. Under PRC Law, the Court is required to give Lin Huoyan notice of this judgement, which they have done by newspaper advertisement, and Lin Huoyan is allowed a period in which to appeal. This period is now over, and the Board are now requesting that the Court issue an order for new Naibu China chops (official stamps) to be issued, and to put the changes to the officers of Naibu China into effect. Once this has been completed, the Board will approach Naibu China's bankers and other relevant authorities in China to obtain Naibu China's records and bank statements. This will enable the Board to determine what assets, if any, remain in Naibu China, and where the Company's cash has been spent. If the Board finds that the Chinese Directors, Lin Zhenzhi or other persons have defrauded the Company, they will pass the records to the Chinese police authorities. Once the Board has obtained full access to the records of Naibu China, it will also review the merits of bringing any legal action against the Chinese Directors, Lin Zhenzhi or other persons.
ST has an article today describing the "comedy" value of Naibu's announcements and questioning how much due diligence the NED's (specifically Giles Elliott) and Daniel Stewart did.
I know the answer with regards to the NEDs and it is that they did absolutely zero DD and just took their fees and lent their names to the company but took close to no interest in its supposed operations or finances (and I know this because someone at Daniel Stewart told me).
They really should be banned from being company directors because they (unwittingly, I'll accept) helped to facilitate a major fraud.
Well, there does seem to have been a spate of (Chinese) firms listing on AIM that have simply fabricated accounts..... and then that have gone to certain lengths to cover the deception up (one of them, I forget which one, saw its British directors fly to China to view bank details of claimed cash deposits). Eventually it all comes crashing down. It is wrecking the market's credibility and is sad for the genuine China plays out there - such as Hutchinson China or West China Cement (now listen only in Hong Kong).
It certainly wants looking into but I am starting to agree with OG - you take a bet on such a risky stock there is not that much sympathy in the world to go round. People are dying in Syria who I could care about instead. Why not buy a professional trust that invests in AIM: Miton microcap for instance? I didn't see them investing here - o-: Good luck with genuine investments..... this never was one of those.
This is a classic scandal and obviously one perpetrated by the exec directors but sharing the blame, in my view, are:
the Non Execs - asleep at the wheel at best (and should be banned from being company directors)
LSE/AiM - for allowing it to happen
Nomad Daniel Stewart - total bucket shop which should have been shut down a long time ago
Simon Thompson of the IC - sucked in many small shareholders, relentlessly puffing Naibu when there were clear warnings it was a fraud and then just cut and run when the brown stuff began to hit the fan and now on the basis of having told people to sell claims it as some sort of success for himself.
Interesting letter in the FT today from John
Gunn (ex CEO of B&C amongst other claims to fame). I'm not sure I
completely buy it - if an geezer like me can see (as I did) that all
these China AiM listings were likely to be frauds shouldn't a big multi
millionaire businessman like him not have been able to do so but anyway
here's what he says
Sir, As a meaningful shareholder and (smaller) loan-note holder in
Sorbic, I read Patti Waldmeirs article (Notebook, May 27) with great
interest. This is indeed a terrible state of affairs, whereby the system
created to give reasonable protection to shareholders of Aim-listed
companies has failed completely.
The Aim arm of the London Stock Exchange has allowed so many flaky
Chinese companies, where corporate governance is seemingly an unknown
concept, to list in London. What information on Chinese executives
holding corporate seals and licences, and therefore total control over
the companies finances, was given by nominated advisers (nomads) and
brokers? Precious little I think.
Is the lack of action (by the London Stock Exchange) on these many
scandals the result of brushing a problem under the carpet so as not to
annoy the Chinese authorities or a fear of putting off further lucrative
Chinese IPOs (with big fees for the LSE), or a combination of both?
I have been pressing the company for some time to come clean on this
affair. Now, with your assistance, it has. However, the biggest scandal
is the complete lack of protection for shareholders under Aim rules at
all stages in the life of such companies. Compensation from the LSE,
nomads and brokers is surely due?
Naibu joined the AIM Casino on April 5 2012 and from that day to the bitter end it always insisted that it had zero debt and cash of c£40 million.
[Link to] a notice of a transfer of a RMB 159 million (c. £16.6 million) loan from the Commercial Bank of China to China Cinda Asset Management.
This is dated 8 January 2015 seven days after the FD quit and a day before the NED's got trading in the shares suspended. Cinda appears to be a purchaser of distressed debt.
The borrower in Items 10-16 is Naibu (China) Co Ltd. Fuzhou Branch. Loan guarantors are multiple corporates and individuals, including Mr Houyan Lin, CEO of Naibu. The original lender was the Commercial Bank of China, Fuzhou Tajiang Branch.
Suddenly a company claiming no debt has a lot of debt. When I wonder was this loan taken out.
[The second loan is] a RMB 3.5 million 18% interest loan to Naibu China from a private lender taken out in mid-2011, with Mr Lin as guarantor. . - the loan was due mid-2013, but neither principal nor interest had been repaid.
Apparently the loan was taken to help with the IPO. But at no stage did Naibu ever referred to having had any loans at all. That was clearly a lie. Moreover if it really had £40 million in its bank account clearing this debt would have been easy.
It's interesting reading a discussion between 2 people when one is on ignore, so I can only read one side of the conversation, and imagine what the other is saying.
It does seem that Orchard is being the same as he ever has been; and I can reassure myself that I need no longer read his derogatory, insulting, and always negative posts.
It must be a horrible life trying to find fault with everyone all the time, and taking delight in other's misfortunes or lack of knowledge or understanding.
It also means, if he spends so much time on the BBs of companies he thinks are a joke, he is missing out on some fabulous opportunities, or maybe he only shorts companies - that would certainly suit his analytical bias.
There had been suggestions that Naibu was a fraud long before the dividend skip gave the game away. Take a look back though some of the posts here. But of course, you weren't interested in considering a different viewpoint and tried to talk it up, so you deserved what you got.
So you didn't suggest that Naibu had increased it's profits and would continue to do so, had net cash worth double its market value, passed the div so they could build a nice new factory and had no debt and so were a great buy.
To me that sounds about as ramping as one gets, especially given all the signs and all the warnings that this was a fraud.
I have a view that kn()bs like you who relentlessly push scams like Naibu should at the very least accept some responsibility for what then happens.
the fact you thought is was sign of a bargain that it traded at (supposedly) a P/E of less than one only proves you are a clueless ramper and if it had been you being chased by the dog I'd have urged Fido on.
So you have an unreasonable prejudice against small girls who sob with fear? Did one bite when a small child after a heroic rescue? I'm ok being small and occasionally sobbing with fear, it's called being human.
As for being wrong, with the fabulous acquisition of hindsight, I was wrong not to buy at the bottom of the market and sell at the top before suspension.
In November of 2014 the Qualifying Executives in the Nomad team at Daniel Stewart, led by China fraud specialist Mr Paul Shackleton all quit and it was forced to tell those AIM Casino companies it represented that they needed a new Nomad or would be slung off AIM. I can now reveal that the London Stock Exchange then secretly scre*** ordinary investors in order to avoid its own humiliation.
The LSE was aware that some of the companies Daniel Stewart had floated were not investment grade material suitable even for the casino while at least one (Naibu) but possibly more were outright frauds. By November 2014 it was an open secret in the Square Mile that Naibu stunk.
However it did find a Nomad to take it on as did all bar a couple of the Daniel Stewart clients. We had all assumed that the new Nomad for Naibu, ZAI Corporate Finance, had signed a form saying that it had undertaken due diligence on Naibu and that it was kosher. Given that Naibu's CEO Houyan Lin was in prison at the time and that its purported cash pile just does not exist we had suggested that ZAI is not fit for purpose as a Nomad.
We stand by that view but in the case of Naibu we would like to apologise to ZAI. For whilst investors in Naibu thought that it was kosher because to take it on, a new Nomad must surely have checked it out, the reality is that there was no due diligence done by ZAI or indeed by any Nomad taking on a Daniel Stewart client because the LSE (AIM Regulation) arranged secret waivers.
We have been passed copies of special forms Nomads were given when taking on the Daniel Stewart client base where they can sign off on taking on the client stating that they have done no due diligence at all. Instead they simply had to undertake to do DD within two months and if that failed they could then resign. The Nomads were all reminded by the LSE that they were operating under a strict code of confidentiality with the implied message that if a Nomad blabbed it could then face disciplinary action.
The net effect of this cover up is that anyone who bought share in Naibu after 12 December when ZAI was appointed should now sue the LSE for their entire loss - the stock was suspended on January 9 as the NEDS smelled a rat and will not return. They can justifiably claim that they bought thinking a new Nomad had done DD but that was not the case because of a secret scheme organised by the London Stock Exchange.
This scheme was reckless in the extreme because there could have been other frauds which folks could have bought into thanks to the LSE cover-up - I still believe China Chaintek is a total Norfolk. And you may well ask whether anyone else would have taken on Rangers FC ( subsequently suspended) had this waiver not been applied?
So why was the LSE happy for private investors to get scre***in this way? To spare the blushes of Daniel Stewart by not having a raft of the sh*** it floated deemed "not fit for purpose" by its peers? I doubt it. The reason is China. A couple of Asian/Chinese PLCs saw their AIM Casino careers die as Daniel Stewart lost its Nomad license. They were just too hot to handle, too close to being insolvent. But had Nomads had to to a full "new client DD" report on Naibu and others there could have been a mini cull of the AIM China plays which could well have set alarm bells ringing at Allenby (nomad to the fraud Camkids) and Cairn (nomad to the fraud Jiasen) and elsewhere. A mini bloodbath of China AIM frauds would have been FT front page. Instead under the LSE secret scheme the bad news got dribbled out.
That is less humiliating for the LSE, which insists there is no problem with China fraud on the casino and indeed is keen to get other Chinese companies listing on the casino. And if - as was the case with Naibu - the LSE's secret cover up caused private investors to lose their entire investment having bought shares they thought were the subject of DD, well so what? The LSE clearly thinks that private investor
1. It's funny
2. I know some of the individuals involved
3. It is a scandal which has implications for AiM and the Nomad system from which lessons should be learnt
4. It's a good example then even when it is obvious that there is something seriously wrong with a listed company there are those including a number of posters here who refuse to listen or take on board the warning messages.
5. It annoys people like you.
So now time for my question: how did you come to post so many laughably stupid comments on this BB?
Another of the Chinese AiM frauds unwinds as Sorbic now admits that its CEO has stolen all the company's cash and so it is, in effect, bust. Oh and the Chinese police have refused to get involved saying this is a commercial and not a criminal matter i.e. you lot have round eyes so we're not going to help you against a Chinese person.
Naibu, Sorbic both now exposed as frauds and a list of other AIM China stocks which claim to be sitting on vast cash piles but cant seem to afford cash dividends. JQW, Jiasen, Camkids, China Chaintek.
5. Because it winds up dead heads like you who claimed Naibu was a bargain on a P/E of less than 1. Doh! So if I'm making the point that you were no only wrong (we all get investment decisions wrong) but so wrong in the face of the available evidence to be described as stupid and if this annoys you, then you have reason 5.
Instead of asking me rhetorical questions would you not be better explaining how you made so many dumb posts here and maybe even show a little mea culpa? Or is that beyond you?
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